J S
LQ3Q
A /3 ative Document (1982)
No. 107
STATE OF) NEW YORK
LaMM^HMM*WMW
IC-NRLF
REPORTS
OF THE
M7 3M7
New York State Joint Legislative
Committee to Investigate the
Affairs of the City of New York
1921-1922
ALB AsN Y
J. B. LYON COMPANY, PRINTERS
1922
DOCUMENT*
Legislative Document (1922) No. 107
STATE OF NEW YORK
REPORTS
OF THE
New York State Joint Legislative
Committee to Investigate the
Affairs of the City of New York
1921-1922
ALBANY
J. B. LYON COMPANY, PRINTERS
1922
H ,' *J 1 ! . ; i; :
I C
THE COMMITTEE
SCHUYLER M. MEYER, Chairman.
SIMON L. ABLER, Vice-Chairman.
THEODORE DOUGLAS ROBINSON, Secretary.
MAXWELL S. HARRIS, THEODORE STITT,
FREDERICK KAVANAUGH, WALTER W. WESTALL,
BERNARD DOWNING, CHARLES D. DONOHUE,
SOL ULLMAN, MAURICE BLOCH,
JOHN R. YALE, PETER J. McARDLE,
CLAYTON R. LUSK, Ex-officio.
JAMES J. WALKER, Ex-officio.
ELON R. BROWN, Counsel.
LEONARD M. WALLSTEIN, Associate Counsel.
SAMUEL A. BERGER, Associate Counsel.
ALEXANDER OTIS, Associate Counsel.
FRANK LORD, Associate Counsel.
PERRINE & NICHOLS, Accountants.
SPENCER PHENIX, Special Assistant.
A. D. H. SMITH, Special Assistant.
In charge of the field work of various phases of the investiga-
tion were:
FREDERICK RIPPON, WILLIAM BULLOCK,
CLARENCE KING, MAURICE DEUTSCH,
PAUL C. WILSON, WINTHROP D. LANE,
LEO J. MCDERMOTT, JULIAN I. MASKS,
[Hi]
596306
JOINT RESOLUTION CONSTITUTING THE NEW YORK
STATE JOINT LEGISLATIVE COMMITTEE TO IN-
VESTIGATE THE AFFAIRS OF THE CITY OF NEW
YORK
ADOPTED APRIL 15, 1921.
WHEREAS, It is the common report that the revenue of the
City of New York is insufficient to meet the requirements of the
public schools and other municipal departments, and the general
financial status and the credit of the city are in a perilous
position; and
WHEREAS, It is the common report that such financial condition
of the city is due, in part, to inefficiency, waste and corruption
in various departments of the city government, and
WHEREAS, It is also the common report that the personnel and
the current administration of various departments of the govern-
ment of the city has been demoralized and subjected to practices
prejudicial to the public interest; and
WHEREAS, It has been repeatedly stated in public reports and
as matters of public information that the financial difficulties of
the said city, and the inefficiency and waste in the administration
of its government are due, in part, to duplication and defects in
the structure of its government under existing laws, and
WHEREAS, There is and for a long time has been an insistent
and widespread demand by citizens of such city that the legis-
lature inquire into all such matters for the purpose of enabling
the legislature to correct such abuses, cure defects and afford
relief to such city so far as the same may be done by law, and
WHEREAS, It is the duty and function of the state to lend such
assistance as it can to secure to such city and its citizens residing
therein honest, efficient and economical local government; now,
therefore be it
Resolved (if the Assembly concur), That a joint legislative
committee is hereby constituted, to consist of five members of the
senate to be appointed by the temporary president of the senate
and six members of the assembly to be appointed by the speaker
of the assembly, with power and authority to investigate the
general financial condition of the city of New York, the causes
[v]
vi JOINT RESOLUTION
thereof, and the remedies therefor, and to inquire and examine
into all and singular the aforesaid matters and allegations, and
to inquire into the accounts, the structure and the methods and
manner of administration of any and all the departments, bureaus,
offices, boards and commissions of the government of the city of
New York, and of the boroughs thereof, and of the counties
geographically included within said city and into every matter
and thing that affects or has affected the present, past or future
conditions surrounding or in any way bearing upon or relating to
the financial condition of said city, the structure and the admin-
istration of the municipal government thereof, and of the govern-
ment of the counties geographically included within said city.
The investigation of the committee may include every other mat-
ter and thing not specifically mentioned in this resolution relevant
to the general question of ascertaining and improving the financial
conditions of said city and the structure and the administration
of the government thereof, and of the counties geographically
included therein, as though the same had been expressly specified
therein.
Further resolved. That such committee be hereby authorized
to sit in the city of New York, or elsewhere within the state, and
conduct the investigation herein described during the session of
the legislature and during the recess or after the adjournment
with the same power and authority it would have were the legis-
lature in session to choose a chairman from among its own mem-
bers, to employ a secretary, counsel, accountants and such other
assistants as may be needed, to take testimony, subpoena witnesses
and compel the production of books, documents and papers, to
have the assistance and cooperation of the officers and employees
of the city of New York and of the counties included geographic-
ally within said city and access to and examination of all records,
books, papers and documents of said city and counties and of
any and all departments, bureaus, offices, boards or commissions
thereof, and otherwise to have all the powers of a legislative
committee. The committee may at any time and from time to
time by resolution of a majority of its members, be subdivided into
sub-committees of such number as it may by majority determine,
which sub-committees may sit at the same time and place or at
different times and places in the state of !N"ew York during the
session of the legislature, during its recess or after the adjourn-
ment, each such sub-committee to appoint its own chairman and
JOINT RESOLUTION vii
to act by majority vote of its own members and to administer
oaths and to issue subpoenas requiring the attendance of witnesses
and the production of books, papers and documents and to do all
other acts and things that may be done by the committee as a
whole or that may be delegated to it by the full committee.
Further resolved, Whenever in its judgment the public interest
demands, the committee may determine that a person shall not
be excused from attending and testifying before said committee
or before any sub-committee thereof, or from producing books,
papers or documents before the committee or such sub-committee
in obedience to its subpoena on the ground that the testimony or
evidence, documentary or otherwise, required of him may tend
to incriminate him or to subject him to a penalty or forfeiture;
but no person so attending and testifying or producing such
books, papers or documents, who has duly claimed excuse or
privilege which would be sufficient except for this provision of
this resolution and which said excuse or privilege has been
expressly denied by the committee, shall be subjected to prosecu-
tion or to any penalty or forfeiture for 01 on account of the
transaction, matter or thing concerning which he may as afore-
said testify or produce evidence, documentary or otherwise, before
said committee or sub-committee in obedience to its subpoena.
Further resolved, That said committee shall report with all
convenient speed, but not later than February 1, 1922, the results
of its investigations to the legislature; and that such committee
shall also report, from time to time, such results of its investi-
gations as relate to or bear upon the finances and the structure
of the government of the city of New York, and the counties
geographically included therein, to any commission now or here-
after created by law for the study and general revision of the)
Greater New York charter, and the acts amendatory thereof or
supplemental thereto, or other acts relating to the government of
said city.
Further resolved, That the sum of one hundred thousand dol-
lars ($100,000), or so much thereof as may be necessary, is hereby
appropriated from and out of the contingent fund of the legisla-
ture for the necessary expenses of said committee and to be paid
on vouchers approved and audited according to law.
CONTENTS
FIRST REPORT PAGE
First Report of Joint Legislative Committee 3
I. Financial 5
II. Division of Authority between the City and the Legislature . . 6
III. Adherence to Precedents 7
IV. Limit of Delegation of State Authority to the City 8
Minority Report 10
SECOND REPORT
Report on the Department of Docks 13
Profiteering in Wharfage 15
Losses on Long Term Leases 17
Losses on Staten Island Piers 18
Lack of Zoning and Warehouses 19
City Wastes its Property 20
Unsound Dock Finances 21
Excessive Cost of Policing Docks 22
The Port a Matter of State and National Concern 23
Growth of Port 24
Recommendations 1 24
Exhibit "A," Assessed Value and Gross Revenues of the Dock
Department Properties, 1920, by Borough and District Segregation. 27
Group I, North River, Battery to Fifty-ninth Street 27
Group II, East River, Battery to Fifty-ninth Street, Manhattan ... 28
Exhibit "B," Table Showing Rates of Wharfage Charged by 24
Lessees of City-owned Piers, Compared with Berth Space Leased. . 29
Exhibit " C," Table Showing Rates of Wharfage Charged by Steve-
dores and Intermediaries for Public Pier Wharfage, for which the
City Received Prescribed Rates, as Shown 29
THIRD REPORT
Report and Recommendation on the Board of Education 33
A. Inadequate School Accommodations 33
B. Fire Hazards 34
C. Negligent Administration 35
Unsound Legislation 36
1. Complicated and Antiquated Provisions of Law Requiring the
Co-operation of Many Other Branches of the City Government
in Building Operations with Resulting Delays, Often Amounting
to a Veto of a Building Project 37
2. Statutory Powers Properly Belonging to the Board of Education
Now Vested in Bodies or Officials Nominally Subordinate to the
Board but in Fact Superior in Respect of Such Powers 39
t frequent Changes and Conflict of Laws Governing the Administra-
tion of Schools 38
Finances 39
i-Political Board of Education 41
[ix]
.
x CONTENTS
Recommendation on the Board of Education Continued PAGE
Appendix, Education Under the Greater New York Charter 45
Education Under the Provisions of Chapter 786, Laws of 19d7, as
Amended through 1921 50
1. Reduction in Size of Board of Education from 46 to 7
Members 57
a. Inadequate School Accommodations 59
Statement Showing the Corporate Stock Authorizations and
Cash Expenditures from January 1, 1910, to June 30
1921 .' 66
b. Fire Hazards in Schools 67
Authorizations and Expenditures for Fire Prevention Work
as of August 10, 1921 63
c. Failure to Repair Fire Damage to Board of Education Build-
ing : 71
d. Incomplete By -Laws and Delayed Minutes 73
2. Possibilities of Conflict Between the Board of Education and
the Superintendent of Schools, Relative to Respective
Powers 75
3. Possibility of Conflict Between the Board of Education and
the 'Municipal Authorities Relative to their Respective
Powers 78
4. Failure to Concentrate in Clear and Unmistakable Language
Full Responsibility for the Proper Administration of the
Public School System either on the Municipal Authorities,
the Board of Education or the State of New York 86
5. Limitation of the Powers of the Board of Education 86
6. Great Increase in the Powers of the Superintendent of
Schools 86
7. Perpetuation of the Board of Superintendents 86
8. Perpetuation of the Bureau of Compulsory Education, School
Census and Child Welfare 87
9. Conflict Between Section 1102 of the Charter, Which Was Not
Specifically Repea^d, and the State Education Law, Rela-
tive to the Disposition to be Made of the City's Share of the
State School Moneys, the Former Providing that Such
Money be Credited to the City's General Fund for the
Reduction of Taxation and the Latter that it be Credited to
the Board of Education 88
10. Increase from 3 Mills to 4.9 Mills in the amount Which the
City is Required Annually to Appropriate for the Use of
the Board of Education 89
11. The Inclusion Within the State's Educational System, of
City Boards of Education of the City of New York and
the Subordination of the Municipal Authorities to the
State in Matters of School Administration 94
Development of Public Education in the State and City of New York
Prior to 1897 96
Historical Development of the Educational Section of the State
Constitution 96
Dutch Colonial Period 98
English Colonial Period, 1664-1776 98
Education Under the First Constitution, 1777-1821 99
Education Under the Second Constitution, 1822-1846 102
Summary 105
The EvoHition of Public Education in the Present City of New
York 107
The Former City of New York 107
Brooklyn .....! 116
Queens and Richmond 119
CONTENTS
XI
FOURTH REPORT PAGE
Report of the Finances of the City of New York, March, 1922 123
Abuses in Financial Management 124
(a) Revenue Bonds 125
(b) Special Revenue Bonds 125
(c) Tax Notes 12)6
The Abandonment of the " Pay-As-You-Go " Policy 136
Tax Limit Exceeded 138
Debt Limit Exceeded 140
General Consideration on the Tax Limit and the Debt Limit 142
Manifest Financial Reforms 142
State Taxes 143
Financial Requirements of City 144
Necessity of Constitutional Amendment 144
Recommendations for Relief 144
Exhibit "A," Showing Growth of Net Funded Debt Less Sinking
Fund Since Consolidation 146
Exhibit " B," Showing Cost of Administration, Debt Service, Tax
Deficiencies, State Taxes and Total Budget Since 1910 146
Exhibit " C," Showing Budget Total, General Fund Revenues
Deducted and Amount of Tax Levy 147
Exhibit " D," Schedule of Real and Personal Property Assessments
Since 1918 147
Exhibit " E," Schedule Showing Yearly Per Capita Cost and Average
Per Capita Costs Under the Various Administrations 148
Exhibit " F," Statement Showing the Amount of Uncollected Taxes
as at December 31, 1921, Classified as to General Character of
'Property Against Which Taxes are Levied 150
Exhibit " G," Schedule Showing Monthly Outstanding Balances of
Corporate Stock Notes, Special Revenue Bonds and Bills of the
Period December 31, 1917, to June 30, 1921 151
Exhibit " H," Schedule of Special Revenue Bond Authorizations
During Year 1920 155
Exhibit "I," The Story of the City's Sinking Fund Transactions
During 1920 15
Exhibit " J " 162
Report on the City of New York, Made for the New York State
Legislative Committee to Investigate the Affairs of the City of
New York 165
Exhibit " K," Memoradum by Counsel for the Joint Legislative
Committee on Constitutional Limitation of the Taxing Power of
the City of New York 167
Exhibit "L," Memorandum by Counsel for the Joint Legislative
Committee on the Constitutional Limitations of the Debt Incurring
Power of the City of New York 171
FIFTH REPORT
Report and Summary of the Evidence Concerning Mandatory Legislation,
Department of Police Licenses, Markets and Public Welfare 187
Mandatory Legislation Affecting the City of New York 189
Appropriations which are Completely Mandatory 189
Prevalence of Mandatory County Legislation 189
Items which -are Partly Mandatory 189
1902 General Repeal of Mandatory Charter Provisions 190
Ancient and Obscure Mandatory Statutes 190
Banket Repeal of Mandatory Legislation Recommended 191
Exhibit 1. Mandatory County Salaries 191
Exhibit 2. Mandatory County Salaries 207
Exhibit 3. Brown Bill of 1916 giving city authority over county
salaries . ^08
xii CONTENTS
Summary of Evidence Concerning Mandatory Legislation Cont'd. PAGE
Exhibit 4. Mandatory Salaries in 1921 Budget 210
Exhibit 5. Brown Bill of 1916 giving local authorities over all city
salaries excepting teachers and elective officers 212
Political Interference with Police Administration 214
Hylan Recommends Solovei 215
The Experiences of Deputy Commissioner O'Grady 218
From Assistant Secretary Sinnott, May 10, 1919 220
From Executive Secretary Kelly, January 23, 1920 220
From Grover Whalen, June 18, 1918 220
From Grover Whalen, May 10, 16, 18, October 25, 1918 221
Illegal Police Reinstatements 222
Act of 1907 222
Amendment of 1915 222
Abolition of Board of Review 222
Ordinance of July 2, 1918 222
Executive Board Created 223
Advisory Committee Appointed 223
The " Functus Officio " Opinion 223
Illegal Reinstatements 224
Reinstated after " Functus Officio " Opinion 224
Reinstatement after Dismissal Affirmed 224
Reinstatement after Hearing Denied 225
Maher Case . . 226
Demoralization of the Quartermaster's Division 227
Private Cars Maintained by Police Department 233
1918 Police Games 236
Speculation and Money Making by Police Officials 240
Richard E. Enright 240
Edward P. Hughes 241
Dominick Henry 241
John F. Dwyer 242
The Apartment House Transaction 243
The Hotel Van Cortland Hotel De France 245
The Wire Tapping Case 246
(Division of Licensed Vehicles of Department of Licenses 248
The Routine of a Taxi-Driver's Application 250
The Administration of the Department of Markets 255
The Establishment of the Department 255
The Rules 256
The Rules Administered 256
The Haslot Case 257
The Heineman Case 257
The Woolsey Case 261
Kahn-Kloeblein Case 263
The Katenkamp Case 268
The Turner Case 272
The Case of Barnet Cohen 273
The Lewis Cases 275
The Michels-Telephone Company Case 278
Market Supervisors 2S2
Sale of Army and Navy Food Supplies 283
Department of Public Welfare Kings County Hospital Job 284
FIRST REPORT
NEW YORK STATE JOINT LEGISLATIVE COMMITTEE
TO INVESTIGATE THE AFFAIRS OF THE CITY OF
NEW YORK
December 19, 1921
[1]
FIRST REPORT OF THE LEGISLATIVE COMMITTEE
December 19, 1921.
To the Charter Revision Commission:
The committee deems it advisable at this time to report its
conclusions as to some basic changes in the charter of the City
of New York.
The principal legislative powers of the city are now vested
in the Board of Estimate which is composed of the executive or
administrative officers of the city. The Committee proposes that
the executive or spending power be separated from the appro-
priating power, and for this purpose recommends:
(a) That a Board of Finance of nine members be elected by
the city at large for six years, three to be elected every other year.
(b) That the members, although elected by the whole city,
be resident, as follows : Three in Manhattan, three in Brooklyn,
and one in each of the other boroughs.
(c) That the Board of Estimate and Apportionment and the
Sinking Fund Commission be abolished, and all the powers of
both boards over city finances be transferred to the Board of
Finance.
(d) That the Board of Finance, either upon the recommenda-
tion of the Mayor, or upon its own motion, have the power to
abolish, modify or consolidate the various departments of the city.
(e) That the Board of Finance have the power of confirma-
tion over appointments to the Board of Taxes and Assessments,
whose tenure of office is to be fixed like members of the Board
of Education.
(f ) That the Board of Finance, on the request of the Mayor,
or on its own motion, have the power of removing city officers
by a two-thirds vote for cause.
(g) That the Mayor transmit a budget for the support of the
entire city and of county governments to the Board of Finance,
and have the power of veto over the Board of Finance, subject
to being overridden by a two-thirds vote.
(h) That the office of President of the Board of Aldermen
be abolished at the end of the term of the newly-elected incum-
[3]
4 * Iis-vESti&A*ci6: -OF ' AFFAIRS OF NEW YORK CITY
bent, the Board of Aldermen retaining its present powers and,
like the Board of Finance, choosing its own presiding officer.
(i) That for the purpose of insuring complete financial con-
trol of the new Board of Finance, all mandatory legislation fixing
charges on the city or the counties for services of a purely local
nature be repealed, and that further legislation of this character
be effectually restrained by constitutional enactment.
(j) That the Mayor, Comptroller and Borough Presidents
retain their executive and administrative powers unimpaired.
The new board should be chosen at the annual election in 1923,
and prepare its first budget for the year 1925, since the budget
for 1924 would be prepared before they come into office.
The Committee are of the opinion that if this plan be adopted
it will
First. Separate the appropriating power from the spending
power the legislative from the executive. When a city rivals
States in population, objections to uniting these powers in States
applies to the city. Such powers were united in small munici-
palities on the analogy of business corporations, but in large cor-
porations there is usually a division of such powers;
Second. Furnish an opportunity for the city to become articu-
late to speak directly and exclusively on the financial issue
every two years. The duties of the new board will be financial.
Parliaments and Legislatures are mostly concerned with appro-
priations. A vote for Mayor or Comptroller, etc., under the
present system, gives no means for such an expression, and is
usually given with the express purpose of securing some expendi-
ture without providing any check on the amount available, or
supervision over its expenditure in the sense that States and
Nations have checks over expenditures through the appropriating
power ;
Third. From the dignity and authority of the body, and,
owing to its limited membership, from the dignity and authority
of the several members, and also by reason of its freedom from
administrative duties, attract the best class of candidates avail-
able. It is hopeless to induce persons of high qualifications to
undertake local administration by piecemeal. Nothing less than
general control over the finances of the city will successfully
invite such talent. The election by the city at large of the
members of the Board of Finance, besides tending to unify the
sentiment of the city on the principal question relating to city
government, will be the best means of securing candidates of
capacity and character.
REPORT OF JOINT LEGISLATIVE COMMITTEE 5
Fourth. By creating a legislative body, promote and invite
a more extensive delegation of powers of local legislation, includ-
ing the abolition, modification and combination of departments,
and require a repeal of mandatory State legislation of a local
character; it will also, from its nature, be a powerful factor in
shaping legislation affecting the City of Albany.
Fifth. Through the power of confirmation of members of the
Board of Taxes and Assessments, and the fixed tenure of office,
make them more independent of official interference in the per-
formance of their important public duties and prevent the man-
ipulation of the board to meet the necessities of an extravagant
administration. The power of removal for cause will operate
as a check on malfeasance in city offices.
Sixth. Inspire civic interest and activity by recognizing the
due sense of municipal importance, power and responsibilities of
which the citizens of such a city must be conscious, and nourish
public spirit and develop intelligence on the fundamental matters
of finance and expenditure, which are not now in any adequate
way brought home to the voter when he gives expression to his
views by the ballot.
Seventh. Furnish an opportunity, now lacking, to the admin-
istrative officers of the city to give adequate time and attention
to administration.
The urgent reasons for a change in the system of city govern-
ment now in force are apparent, and may be summarized as
follows :
I. FINANCIAL
The maintenance of the city in a sound financial condition,
with a credit equal to meeting its public necessities, is of the
first importance to the municipality and its citizens and to the
State. The city debt has increased every year since the city
was organized. The gross funded debt in 1898 was $344,000,000,
of which $212,000,000 had been incurred for non-revenue pro-
ducing purposes. This debt (exclusive of general fund bonds)
had increased in 1921 to $1,246,000,000, of which $835,000,000
was non-revenue producing. In addition to this, the city carries
a temporary debt of approximately $100,000,000, which is not
computed in determining the debt limit.
The tax levy has kept pace with the growth of the debt. The
budget in 1898 was $77,000,000 and in 1921 $345,000,000,
while the per capita charge for taxes has risen from $23.12 in
1898 to $59.77 in 1921.
6 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
The tax-roll has increased from upward of $3,000,000,000 in
1898 to $10,186,207,279 in 1921, the rate of increase being
reasonably uniform from 1904 to 19'21, when the real estate
assessment jumped from $8,626,000,000 to $9,972,000,000 in an
attempt to keep within the debt and tax limit. The exact
increases are not yet obtainable for the year 1922, but the pre-
liminary estimate furnished the Comptroller by the Department
of Taxes, places the 1922 assessment at $10,500,000,000.
Without taking up now the pending questions relating to the
debt limit and tax limit, it is beyond controversy that the city
is using its entire taxing power for ordinary expenses, in the
face of urgent needs for essential public service schools, rapid
transit, docks, markets and a marginal railway. Instead of
furnishing evidence of the city's financial soundness, the rapid
rise in assessments indicates the exhaustion of the city's credit,
and a manipulation of the taxing power to conceal it. It may
be added that in 1921 the city found it necessary for the first
time to resort to the doubtful expedient of basing its tax limit
on the current assessment rather than on the assessment of the
year before, as heretofore practiced in other cities of the State,
and the present budget indicates that the same doubtful expedient
of increasing the taxing power will be resorted to in 1922, in an
attempt to keep within the constitutional tax limit. The Comp-
troller has publicly advised the Board of Aldermen of the neces-
sity of cutting $10,000,000 out of the appropriation for schools
to keep within such increased limit.
Such a showing gives no promise of recovery under the present
municipal organization, but foreshadows financial disaster.
II. DIVISION OF AUTHORITY BETWEEN THE CITY AND THE
LEGISLATURE
It is apparent from the number of amendments to the charter
since its re-enactment in 1901 that it is not laid down on reason-
ably permanent lines. As appears by the session laws the charter
has been amended or modified by 1,666 separate laws, exclusive
of general laws affecting the whole State. There were 116 such
laws in 1920 and 82 in 1921. Many of these statutes fix salaries
of city or county officers; 52 such statutes have been passed in
the last four years. Five hundred and five bills amending the
charter have been vetoed by the Mayor since 1907, and with the
bills introduced but not passed by the Legislature, form a vast
REPORT OF JOINT LEGISLATIVE COMMITTEE 7
mass of legislation claiming the attention of the Legislature.
This legislation, whether passed or not, results:
(a) In a constant disturbance of municipal finance and admin-
istration, frequently creating uncertainty of purpose and policy
in the conduct of the city government.
(b) In causing a feeling of resentment and dissatisfaction
over State interference with matters that are purely local in their
nature.
(c) In dividing powers of municipal control in the city
between municipal authorities and the members of the Legisla-
ture from the city, who generally control such legislation. This
results in frequent differences between the city authorities and
the Legislature, and through his power of approval and veto of
city bills, between the Mayor and the Board of Estimate. The
Mayor is thus enabled from time to time to secure legislation
affecting the government of the city through the Legislature
which he could not obtain through the Board of Estimate.
(d) In an equally unfortunate effect on the State, as the
Legislature is thus occupied unnecessarily with local affairs to
the exclusion or detriment of general legislation.
These conditions are the cause of general dissatisfaction, and
not infrequently such dissatisfaction is directed toward the State
government, although such legislation could not be enacted with-
out the active support of city members of the Legislature and thf
consent of the Mayor.
The present system has worked badly and calls for basic change*
in the charter and in the relations of the city to the State. Other-
wise present evils will not only continue but become a greater
menace to the public welfare.
III. ADHERENCE TO PRECEDENTS
Present conditions are undoubtedly due to a too close adherence
to municipal precedents which, by reason of the size of the city
and its organization, are more or less inapplicable. They have
preserved the form but discarded the substance of such municipal
organization by depriving the taxpayers, as such, of any par-
ticipation in the city government. This city exercises much
wider authority than is exercised by London, Paris or Berlin.
There is an inherent unsuitability in attempting to fit the institu-
tions of a village or of a city of ordinary population to a munici-
pality greater in population than any State in the Union, except
8 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
New York, Pennsylvania and Illinois; wealthier than any State
in the Union, except the State of which it is a part; with an
annual budget exceeded by few Nations, greater than the three
largest States in the Union combined, and without a parallel
where such appropriations are made by executive authority ; with
a variety of responsibilities in government of great public impor-
tance; and having some problems unknown in other munici-
palities by reason of county organization.
On the other hand, changes should be made only for the pur-
pose of correcting conditions, and not to establish a Utopia, or
to vindicate any theory of government. The present system is
not bicameral, since the functions of the present Board of Esti-
mate and Board of Aldermen are not joint, but chiefly separate.
This will be true also of the Board of Finance and the Board
of Aldermen, and there will be no more reason for abolishing
the Board of Aldermen which furnishes a means of popular
expression on matters of peculiarly local concern, after the Board
of Finance is established, than before.
IV. LIMIT OF DELEGATION OF STATE AUTHORITY TO THE CITY
Under our system of government, two classes of powers are
delegated to the city, those which are of purely local concern,
and those embracing matters which are of State-wide importance,
like the police, education and the local administration of justice.
The Committee is of the opinion that the powers of the city over
matters of purely local concern should be increased, and legisla-
tive interference with the exercise of such powers should be
further and effectually restrained by constitutional enactment.
Such enactment should also include a provision giving power to
the new Board of Finance, in conjunction with the Mayor, to
veto legislation. The restriction as to interference with matters
of a purely local nature may be much stricter than in matters of
State-wide interest. While a municipality may be permitted
to mismanage its own peculiar interest, it cannot be permitted
to prejudice those of others or to violate principles of justice
in dealing with its own citizens.
Considered in its broader aspect, there can be no real conflict
of interest between the State and city in changes in the charter.
It is the duty of the State, of which the city forms so great a part,
to secure for the city the greatest degree of autonomy consist out
with safety, financial soundness and security of citizens ; but these
matters are of equal concern to the State and to the city.
KEPOET OF JOINT LEGISLATIVE COMMITTEE 9
This report is made under the provisions of the resolution
appointing this Committee, as a recommendation to the Charter
Revision Commission. Other reports covering the Committee's
investigation will be submitted.
Kespectfully submitted,
SCHUYLER M. MEYER,
Chairman.
THEODORE D. ROBINSON,
MAXWELL S. HARRIS,
FREDERICK W. KAVANAUGH,
ISIMON L. ADLER;
SOL ULLMAN,
WALTER W. WESTALL,
JOHN R. YALE.
I approve of the report in every respect, except that I believe
the five boroughs of the city should elect their own representatives
to the proposed Board of Finance as opposed to city-wide selection.
THEODORE STITT.
MINORITY REPORT
It is the opinion of the undersigned, the minority of the Com-
mittee, that no recommendations should be made at this time to
the Charter Revision Commission. It is its opinion that only
as the outcome of a consideration which they have been unable
to give, that any views they may entertain 011 a revision of the
present charter should be the result of a longer and fuller con-
sideration. Inasmuch as nothing developed as the outcome of
the investigation, which has continued since last May, of the
affairs of the City of New York, to warrant the recommendations
made in the majority report, the minority dissents totally from
the conclusions and recommendations made therein. In general,
the minority, members of the Legislature elected from the City
of New York, are not at this time prepared to recommend the
extension of any offices, nor are they prepared to agree that the
powers of the Board of Estimate and Apportionment, particularly
the powers of the Mayor and Comptroller, should in any degree
be divided or curtailed. Particularly, in view that the very
handsome as well as substantial majority by which the adminis-
tration of the office of Mayor and Comptroller were ratified and
endorsed by the people not more than a month ago, it would seem
that they should be given an opportunity, in obedience to the will
so emphatically expressed, to correct whatever deficiencies in the
administration of the present charter may exist.
The minority is unanimous that whatever decision shall
be arrived at by the Charter Revision Commission, they recom-
mend to the Legislature that the charter, before it becomes
effective, be ratified by a referendum of the people of the City
of New York.
Respectfully submitted,
JAMES J. WALKER,
BERNARD DOWNING,
CHARLES D. DONOHUE,
MAURICE BLOCH,
PETER A. McARDLE.
[10]
SECOND REPORT
REPORT ON THE DEPARTMENT OF DOCKS
January 31, 1922
[ii]
REPORT ON THE DEPARTMENT OF DOCKS
JANUARY 31, 1922
To ike Legislature and to the Charter Revision Commission:
The administration of the dock department has been marked
by a lack of policy in relation to dock rentals and charges for
docking privileges:
First. When docks are available for lease or permit, leases
and permits are issued, without notice to applicants and pros-
pective applicants, of the intended action of the department, and
publicity is avoided.
Second. Leases are frequently issued to stevedores and specu-
lators having no claim for the accommodation of ships, when ship
owners standing in immediate need of the accommodation are
unable to secure it. Such leases are not infrequently granted for
a less rental than ship owners stand ready to pay. Unable to
secure a lease or permit from the dock department directly,
prospective lessees pay large sums of money to intermediaries
supposed to possess influence, to secure favorable action on their
applications.
Third. ~No attempt has been made to secure an adequate
return to the city for the use of its property, or an income suffi-
cient to cover the cost of carrying its investment. Millions are
raised by taxes annually to meet the interest and amortization
of dock bonds and expenses of maintenance, while income, readily
obtainable without sacrifice, and more than equal to all charges,
is wasted.
Ships frequently berth under leases issued years ago at a quar-
ter or even a seventh of the charge to ships berthing under recent
leases or permits. Like inequalities prevail in payments for
privileges currently granted under the subleasing system. The
highest return now received by the city on the assessed valuation
of a dock is for Pier 69, North river, 12.1 per cent, and the lowest
return for Pier 81, North river, 1.7 per cent. Inequality and
not equality of cost is the rule. The percentage of gross returns
on assessed values in outstanding leases is shown in Exhibit "A"
hereto attached.
While the conditions described were aggravated during 1918-
1921, by war conditions, the main causes of inefficiency and loss
have long prevailed, and though they vary in degree, as in the
[131
14 INVESTIGATION OF AFFAIRS OF ,NEW YORK CITY
present depression, will continue unless fundamental changes are
made. Even in the present depression, representatives of some
of the larger lines complained before the Committee of their ina-
bility to lease piers and of being compelled to send ships to other
ports.
The inevitable results of such a haphazard administration have
been to tax commerce heavily in most cases, and scarcely at all
in others, under the pretence of furnishing a cheap rate to all;
to deprive the city treasury of revenue to which it is entitled by
wastefulness, improvidence and corruption, and to drive com-
merce to other ports, as appears by the testimony of representa-
tives of the French line, the Luckenbach line and others, and by
the official statement of Gen. Black, the representative of the
United States Shipping Board.
A fair charge, based on the rental value of the docks leased and
equal treatment, would encourage commerce and increase the
revenue of the city by many millions of dollars.
The city owns 235 docks, exclusive of the 12 uncompleted
Staten Island docks, which will be taken up separately. This
property ,though exempt from taxation, was assessed in 1920-
1921 by the tax department, as required by law, for $212,226,576.
Docks assessed at $20,310,796 are used for municipal purposes,
and are not available for commerce. The balance, available for
commercial use, is assessed at $191,915,780.
The loss of taxes on the docks by reason of municipal owner-
ship is an essential element in comparing municipal ownership
with commercial ownership. Assuming this property to be held
and managed by the city on a commercial basis, a profit and loss
statement for 1920 shows the cost of carrying this property as
follows :
Interest on $191,915,780 at 6 per cent $11,514,946
Cost of administration, 1920 . , 1,202,427
Two per cent depreciation on estimated value of the
dock construction Jan. 1, 1920 ($70,000,000) . . 1,400,000
Loss of taxes on dock property not used by the city,
exempt ' t [ 4,775,150
$18,892,523
Total receipts from rentals and wharfage, 1920. . 7,094,240
Loss to city on investment in 1920 $11,798,283
OF JOINT LEGISLATIVE COMMITTEE 15
The gross revenue of the department ($7,094,240, in 1920)
consists of the rent from docks for terms of years and receipts
from revocable permits and wharfage. Deducting from the
gross revenue the cost of operation for 1920, amounting to
$1,202,427, leaves an apparent margin of $5,891,813, or
$1,116,663 more than the city would have received in taxes if
the docks had been privately owned. This equals one-half of 1
per cent of the assessed value. This balance is less than the
amount of the annual depreciation and makes no provision for
annual interest or amortization charges on the dock bonds which
are met by taxation, or for any return whatever on the investment
in the dock property.
The most valuable city dock property consists of the piers on
Xorth river between the Battery and 59th street. These piers,
having an assessed value of $117,073,500, produced in 19'20 a
return of only 3.56 per cent in gross revenue on the assessed
valuation. Privately owned piers in this water front section
produced an average return of 11.5 per cent during the year 1920,
and the 150 privately owned piers were operated at a commercial
profit. Such a difference in the rent of public and private piers
is intolerable, indicates a wastefulness in dock management, and
opens the way to favoritism, jobbing and corruption.
PROFITEERING IN WHARFAGE
If shipping and commerce paid no more for the use of docks
than the revenue received by the city, the availability of such
great facilities at so little cost would be some compensation for
the loss of revenue to the city. But the proofs indicate that the
charges paid by shippers for dock privileges far exceed the
revenue received by the city, and are undoubtedly in excess of
the cost to the city of carrying its dock property as a business
investment.
Charges by lessees to shippers during 1920 on 24 leased city
piers, contained in Exhibit " B," hereto attached, show:
Aver ago daily berth charge to ship owners by lessee. $240
Average daily berth cost to lessee on basis of rent
paid to the City of New York 63
Or expressed upon an annual basis of a 300-day
year:
Charge to ship owners by lessees, city piers $5,685,000
16 INVESTIGATION OF AFFAIBS OF NEW YOKK CITY
Cost to lessees of city piers, on basis of rent to city
of New York $1,494,717
Gross profit to lessees of city piers (280 per
cent of rent paid to city) $4,190,283
While these berthing charges were for time when the lessees
were not occupying the piers, the figures establish the rate of
charges on ships not controlling piers during this period, and the
market value of berthing privileges. They were the prevailing
market rates, and there is abundant evidence of like charges.
The dock commissioner during the last four years has issued
to stevedores and other speculators, not ship owners, berthing
permits at public wharfage piers, which in turn have been sublet
to ships entering the port. Charges made to ships for berthing
privileges at such public piers (1920-1921), set forth in
Exhibit " C," hereto attached, show that such ships paid for their
dockage privileges from 54 to 792 per cent more than the clock
department received. The dock department charges for berth-
ing privileges are in part regulated by law (section 859 of the
charter, originally enacted 1882), and are in many cases not
more than 25 per cent of the present market value of the privi-
leges granted. It is inconceivable that ships would pay such
a profit to speculators if they could obtain the privileges directly
from the department at the legal rate. This abuse was abun-
dantly proved. The following cases are stated as illustrations:
The Maritime Shipping Company, a concern without capital,
not maritime, and owning no ships, occupied Pier 72, at the foot
of East 24th street, from September 1, 1919, to November 14,
1920, at an annual rental of $40,000, and rented berthing privi-
leges at a net annual profit of $61,000 over the rent paid.
Sabbatino & Company, a concern composed of a young saloon-
keeper's helper, who was later interested in a small moving pic-
ture house, and a ship's clerk without capital and not engaged
in shipping, received from the dock department a large number
of berthing permits between June 7, 1918, and September 22,
1921, which they sublet to ships entering the port. While their
records were destroyed or suppressed, numerous cases of sn^li
rentals showing a profit of from 66 to 400 per cent over the
amount paid the dock department were established. They were
REPORT OF JOINT LEGISLATIVE COMMITTEE 17
permitted a credit account with the dock department, and de-
posited during this period over a million dollars in bank.
Little or no effort has been made by the city to limit or restrict
wharfage charges by lessees or permittees. It is inferable from
a recent case that the dock department in the absence of a reser-
vation in the lease is without power to limit charges for wharfage
made by a lessee for a term of years, but there has been no
serious effort to change the law.
Shipping concerns failing to obtain such privileges on direct
application to the department are often compelled to seek wharf-
age accommodations at public piers through stevedores or go-
betweens, who enjoy the favor of the department, A statement
of payments to go-betweens will be submitted and marked
Exhibit " D."
LOSSES ON LONG TEEM LEASES
A principal cause of loss of adequate returns on dock property
is found in long term leases made by the commissioner of docks,
with the approval of the Sinking Fund Commission. Dock
leases are restricted by law to a term of ten years, but through
permitted clauses of renewal, the terms are extended to from
thirty to fifty years, with a provision for a 10 per cent advance
in rent at the end of each renewal period. The value of piers
as shown by the assessment, and charges to ships, has increased
during the past ten years a hundred per cent, or ten times more
than the advance secured by these leases to the city.
Three leases of large modern city owned piers in South
Brooklyn, of substantially the same commercial value, illustrate
the city's loss from such leases. The pier at 31st street, leased
to Cyprien Fabre in 1910 for twenty years, produces a rental
of eighteen cents per square foot of area; the pier at 30th street,
leased in 1916 to the Norwegian American for thirty years, and
the pier at 29th street, leased in 1916 to the United States Steel
Products Company for thirty years, produce a rental of thirty-
six cents per square foot of area, while the pier at 33d street,
under permit to the Luckenbacli Steamship Company in 1
1920, gave a return of $1.09 per square foot. On the basis of the
present approximate value of a dollar per square foot, the city
loses $350,000 a year on these three piers, and will continue 1
lose a like amount annually for the next ten years. The loss to
tl.o city on these three leases from 1920 to their expiration wil
approximate $6,000,000.
18 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
Although it has long been apparent that the 10 per cent in-
crease at the end of each renewal period was wholly inadequate,
and the practice was condemned before the committee by the
commissioner of docks, the department has continued to issue
such leases down to the present time, eighteen such leases having
been made during the past four years.
LOSSES ON STATEN ISLAND PIERS
The city now has in course of construction and Hearing com-
pletion twelve piers on Staten Island at an approximate cost of
twenty-five million dollars. These piers, with one exception,
have been leased with an optional ten-year renewal clause for
from thirty to fifty years on a rental basis of 7^2 P er cen t f the
cost. Four of them have been leased to stevedoring concerns
who own no ships. The city retains no control over the wharfage
rates which the lessees may charge, thus furnishing every oppor-
tunity for profiteering, although such a clause was included in the
Luckenbach permit in 1919. Two of these four piers are leased
to the Pan-American Corporation, a non-shipping concern which
advised the committee on October 12, 1921, that their piers would
cost the city $6,000,000, of which one million would be expended
for machinery and cargo handling equipment. Using these piers
as illustrative of the Staten Island piers generally, the annual
profit and loss statement for the first ten years of the lease is as
follows :
Interest on $6,000,000, cost of construction $360,000
Two per cent depreciation of the dock construction,
other than machinery 100,000
Seven per cent depreciation 011 the value of
machinery 70,000
Loss of taxes on dock property because not privately
owned, on valuation of $5,000,000 141.000
Total $671,000
Eental , 450,000
Annual loss . $221,000
At this rate the loss on the twelve piers, costing approximately
four times as much, or $25,000,000, will amount to more than
REPORT OF JOINT LEGISLATIVE COMMITTEE 19
$800,000 annually, or if there be no loss from depreciation on
machinery on other piers, to more than $600,000. The city's
revenue on this lease over loss of taxation and depreciation is
2.3 per cent of the cost, or about one-third of the legal rate of
interest, or about one-half the interest paid on dock bonds issued
to raise funds to build the docks.
Adjoining this new development on Staten Island to the south
there are three large and modern piers (erected 1917-1919)
belonging to a private corporation, comparable in capacity with
the city piers for the accommodation of ships. These piers pay
the owner a gross return of 43.4 per cent on the assessed valuation.
Adjoining the city piers on the north are four old piers, also
privately owned, which pay the owner a gross annual return of
21.5 per cent on the assessed valuation.
Allowing for possible increased cost because of recent construc-
tion and possible lack of economy in construction because done
through a municipality, there seems to be no reason why the city
piers should not have been leased at a fair business return. Why
should city piers be operated at such an enormous loss when
private property similarly situated is operated at such enormous
profit ? There is no evidence of any resulting benefits from such
financial sacrifices.
LACK OF ZONING AND WAREHOUSES
Failure and neglect of the department in establishing zoning
districts for the docking of ships, and adequate warehouse accom-
modation, have resulted in serious loss in the operation of the
docks and the accommodation of commerce.
Zoning districts have not been established so that ships arriv-
ing at the several channels of approach to the harbor can be docked
at the nearest piers, or with reference to their draft or the desti-
nation of their cargoes. In consequence the harbor is congested
and navigation impeded and made more dangerous. Ships arc
frequently docked at piers where ships of greater draft could He,
while docks with less but ample depth are idle. Ships lie in the
harbor awaiting berths, when there is room for all. Cargoe
destined for inland shipment or local distribution are unloaded
at inconvenient points, and reshipment and distribution delayed.
Cargoes are unloaded at points where street traffic is congested,
and the cost of lighterage and trucking greatly increased. There
is no intensive use of the harbor facilities. These additional
*.
20 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
costs have to be borne by the ships that dock and by commerce,
and reduce the rental value of the piers.
There is a lack of warehouse and storage facilities at the docks.
As a consequence cargoes frequently lie for an unreasonabV
period on the docks, preventing their best economic use.
CITY WASTES ITS PROPERTY
The city's proprietary interest in the dock property, acquired
in part through grants from the State, but largely by expenditure
of the taxpayers' money, is assessed at more than $212,000,000,
to which must be added the $25,000,000 invested on Staten Island.
The property is undoubtedly worth more than $300,000,000, and
is rapidly increasing in value. The city is as well entitled to a
reasonable return upon its business investment as private dock
owners. If it accepts less, its action should be controlled by con-
siderations peculiar to its own interest as, for example, the
competition of other ports. No such reason is apparent.
Hitherto the difficulty of correcting the inequality of charges
and preventing waste of the city's property from the system of
leasing, has apparently been treated as an excuse for the continu-
ance of such inequality and waste. But if the system be changed,
great improvement in the equality of charges and great increase
in revenue will immediately be realized with a rapid progression
to the desired end.
The management and control of the proprietary interest in the
docks, as well as the administration of the public utility, are sub-
ject to the dual control of the commissioner of docks and the
sinking fund commission. While the commissioner of docks is
the administrative officer, he acts in the more important matters,
such as granting long term leases and acquiring dock property,
only with the consent of the sinking fund commission. Through
these instrumentalities, the city has had complete control of these
dock properties since 1888.
No legislation has been passed to which the city objected.
The out-of-date provisions of the statute turning the docks over
to the city have remained undisturbed, and still furnish cover for
the abuses in dock letting and management, which have converted
a handsome potential income into a deficit, while speculator?,
profiteers and handy men accumulate fortunes from its use. Not
a subject of popular interest, its management has been undis-
turbed by public inquiry, and the unbusiness-like organization
REPORT OF JOINT LEGISLATIVE COMMITTEE 21
of its finances has hidden from pu'blic knowledge the disastrous
results which would otherwise be obvious. The State has not
intervened to apply even the rudiments of public utility require-
ments, such as equal service for equal charges, and equal oppor-
tunity for service to all.
UNSOUND DOCK FINANCES
The system of dock finances, with its diversion of dock receipts
to other city purposes, is a hindrance to the construction of
new docks, and the maintenance and improvement of the old.
Receipts from the docks of Manhattan were pledged to the sinking
fund for the redemption of the debt of the old City of New York
under its charter, and are paid into this fund. Since the incor-
poration of the greater city, such receipts from other boroughs
than Manhattan, though not covered by such charter provisions,
have been paid into this fund and in 1920 receipts from other
boroughs amounted to $1,895,217. The reason for this practice
may be discovered in the fact that these receipts, like the receipts
from Manhattan, are diverted from docks, find their way into the
city treasury, through the device of the general fund bonds, for
current city expenses, and to reduce the tax rate. The city had
outstanding in 1920 $101,372,036 in dock bonds on which it paid
in that year $4,353,464 interest. Not a dollar of the dock
receipts is applied to interest or amortization under the existing
practice or to new construction or maintenance. Sixty-nine
million dollars of these bonds were irregularly and mistakenly
exempted in computing the debt limit, by order of the Appellate
Division of the First Department in 1913 on the claim that the
receipts from the docks by the city were sufficient to meet the
interest charges and amortization of the amount exempted,
although all of such receipts went to this sinking fund and not a
dollar of such receipts was paid into the city treasury. The
interest on the bonds, exempt and non-exempt, and the amortiza-
tion charges, are met in the annual levy for debt service. The
additional funds, made available to the city by increasing its debt
limit through this exemption, were used in rapid transit con-
struction. The docks were sacrificed in aid of an unrelated
interest. The diversion of the dock receipts from payment of the
debt to current city expenses is condemned by the comptroller.
While this tortuous procedure has operated to increase the cash
in the treasury for general purposes, it is an evasion of the Con-
22 INVESTIGATION OP AFFAIRS OF $"EW YORK CITY
stitutioii, deprives the docks of the revenue applicable to the
reduction of the dock debt and to betterments, and leaves dock
appropriations exposed to the legal limitations of the city's debt
and tax limit and the pressure of other interests for a place in
the budget.
EXCESSIVE COST OF POLICING DOCKS
The cost of policing the docks of the city, as shown by the
records of the War Department, is as follows:
1917 ...................................... $30,660,000
1918 ...................................... 33,850,000
1919 ...................................... 41,610,000
1920 ...................................... 35,850,000
And the men employed:
1919 ...................................... 19,000
1920 ...................................... 16,000
1921. 12,000
The entire police budget for the City of New York, with its
307 square miles and approximately 6,000,000 inhabitants, was:
1917 $18,200,191
1918 19,394,613
1919 20,662,219
1920 24,595,186
1921 28,545,407
And the number of men employed was :
1917 ' 11,237
1918 10,952
1919 11,047
1920.. 11,197
A representative of a large shipping company testified before
the Committee that " the entire condition along the water front
is very bad and that all private detective agencies * and
our own employees on the dock, have all apparently reached a very
demoralized state, and we consider that something radical and
extraordinary has to be done." This statement may be accepted
as descriptive of conditions. A statement of the number of men
employed and the amount expended is sufficiently suggestive of
or JOINT LEGISLATIVE COMMITTEE 23
the necessities of a complete change of system. Such a charge
on commerce and on the use of the docks is a staggering burden,
reflected in the cost of living, and the reduced value of pier
rentals. This excessive cost is largely due:
First.. To lack of a general agency under which co-ordination
of service is possible. Each line or individual ship is compelled
to rely upon its separate organization for police purposes without
the aid or co-operation of the organization of any other line.
Second. To the dependence of each line and individual ship
upon the co-operation of the police department, which imposes
its own private conditions in making the dock guards special
policemen, dictates the appointment of heads of such dock guards
and the employment of private agencies to do the work. One
such agency, newly organized, but enjoying the favor of the police
department, took over the policing of docks for forty shipping-
companies in 1918. Instances of compulsory employment as a
condition of police co-operation and payments to an inspector in
alleged consideration of service in compelling such changes were
proved before the Committee.
Notwithstanding the expenditure of these vast sums for pro-
tection, pilfering and theft have been extensive and protection
has not been efficient. This condition can be largely accounted
for by inefficient organization, by the compulsory employment of
useless or untrustworthy persons and by the radically unsound
relation of dock protection to the police.
THE POET A MATTER OF STATE AND NATIONAL CONCERN
While the port constitutes an indispensable prerequisite of the
city's prosperity, and the city's ownership of the docks is an impor-
tant factor in protecting the city's interest, the port has other
relations of equal or greater importance to the State and Nation
as the principal port of entry for both. The character of its
management is immediately reflected, not only in the cost of
living and the employment and prosperity of its citizens, but in
the cost of living and the employment and prosperity of the people
of the whole State and of millions of people throughout the
Nation. As a part of the Nation's navigable waters, it is subject
to the jurisdiction of the Federal government, which expends
millions annually for the improvement of the harbor. It is the
State's most important public utility, and as such has always been
subject to the State's potential control. This control was exer-
24 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
cised down to 1888, when it was transferred to the city by act
of the Legislature. The degree of control which the State exer-
cises over the port for the accommodation of ships will always be
determined by the public interest. The State owes an obligation,
not only to the city and its people, but to the people of the whole
State, to secure an efficient and economic management, with equal
facilities and equal charges to all.
GROWTH OF THE PORT
A statement of the increase of business of the port will aid in
understanding the matters under consideration. The world's
mercantile and marine tonnage increased from 22,151,651 tons
in 1900 to 49,089,552 in 1914, or more than 121 per cent in four-
teen years. The merchant marine of the United States increased
in the same period from 4,424,497 tons to 7,928,688 tons, or 79
per cent. The value of imports and exports at the port increased
in the same period from $1,056,071,753 to $2,124,592,146
During the war period the United States Merchant Marine
reached 16,324,024 tons (1920) and the value of the imports
and exports at the port increased to $6,288,287,521.
The port, by its great natural advantages, has reached its
present position among the ports of the world, in spite of the
mismanagement of its docks, but with increased trade, the dis-
advantages of maladministration have become more burdensome
and a greater drawback in competition with other ports.
This report is based on testimony already taken. The Com-
mittee has not yet completed its investigation of the docks, and
the subject will be further dealt with in the Committee's final
report when the hearing is closed.
RECOMMENDATIONS
The Committee recommends:
First. That the office of the present dock commissioner
originally established for the old City of New York, and the
control of the Sinking Fund Commission over the docks, be
abolished.
Second. That a new dock commission of three members be
established, to be appointed by the Mayor, one from a list to be
named by the maritime interests of the city, one from a list to
be named by the New York Chamber of Commerce, and one at
REPORT OF JOINT LEGISLATIVE COMMITTEE 25
will, who shall be chairman of the commission. That the tenure
of office be eight years, the first appointees to hold for four, six
and eight years, respectively, as determined by law, and that such
commissioners be subject to removal for cause.
Third. That existing provisions of law affecting the dock
finances be so amended that all receipts from the docks be subject
to appropriation by the city for the following purposes and in the
following order of preference :
1. For expenses of administration of the dock department.
2. For payment of interest and amortization of dock bonds.
3. For the maintenance and repair of docks and if not other-
wise provided, for the extension of docks.
4. For the transfer of any surplus not required for the purposes
cited, to the general fund.
Fourth. That the charter and all laws affecting the docks be
revised in harmony with the recommendations of this repart.
Fifth. That the commission have power to fix rates of all
rental charges by the city, by lessees and by private dock owners,
such charges to be as nearly equal for the service as existing
conditions permit; to provide for zoning regulations; to restrict
the term of leases to a year unless the necessities of commerce
require, and in no event to grant leases for a longer term than
ten years without a revaluation, or in a manner to interfere with
the general development of the port; to provide for the appraisal
of the rental value of all properties leased, and to fix the rental
on a fair business basis for a reasonable return from such value ;
leases of city docks to be made according to the necessities of
commerce, which shall be determined as a fact by the commission ;
no lease to be issued without reasonable public notice of the inten-
tion to grant it ; applicants who would be entitled from the neces-
sities of commerce to receive such lease, to be listed in the order
of their respective necessities, and preference given to the first
one on such list who will pay the rental fixed therefor. If none
of the applicants listed will take the lease at such rental, then
the same to be put up at public auction and leased to the highest
bidder on such list, subject to the right of the commission to
reject any and all bids.
FixiTi. That all payments for procuring or aiding in procur-
ing or extending leases or permits, and all payments in connection
therewith, be prohibited unless the same be for legal proceedings
had before the said commission, or in court, the amount of such
20 INVESTIGATION OF AFFAIES OF NEW YORK CITY
payment or payments in every case to be subject to the approval
of the commission or court before which the proceeding is had ;
all leases and permits to contain a clause that if this provision of
law be violated, the commission may cancel the lease or permit at
any time during its continuance without waiver for any cause.
Seventh. That the policing of the docks when under lease or
permit, now treated as guarding private property, be conferred
upon a commission of seven members, without pay, to be named
in the bill, representing as nearly as may be the various maritime
interests using the port ; vacancies to be filled by the commission
under such restrictions as will insure the continuance of its
representative character ; such commission to have power to estab-
lish and maintain a distinctive organized police force for the
protection of merchandise on the docks, and to fix and apportion
charges for the .services rendered, which shall be sufficient to meet
the expenses incurred ; tha/t in the employment of such force
preference be given, as far as consistent with the interests to bo
served, of honorably discharged soldiers, sailors and marines;
that the said commission have the power to promulgate rules and
regulations not in conflict with law for the maintenance, discipline
and control of such police force; that the jurisdiction of such com-
mission or its police force upon any dock be conditioned upon
the written reqilest of the lessee or permittee, or authorized accent
of either, or the commanding officer of the ship using the dock,
that police protection be extended thereto.
Respectfully submitted,
SCHUYLER M. MEYER,
Chairman.
SIMON I. ABLER,
Vice-Chairman.
THEODORE DOUGLAS ROBINSOX.
MAXWELL S. HARRIS,
SOL. ULLMAN,
THEODORE STITT,
JOHN B. YALE,
WALTER W. WESTALL.
ELON R. BROWN,
Counsel.
REPOET OF JOINT LEGISLATIVE COMMITTEE 27
EXHIBIT "A"
Assessed Value and Gross Revenue of the Dock Department
Properties, 1920, ~by Borough and District Segregation
Group
I.
II.
Location
North river, Battery to 59th street. . . .
East river, Battery to 59th street
Gross
revenue
$4,175,215
1,338,467
Assessed
valuation
$117,073,500
27,440,230
Per-
centage
3.56
4.86
III.
IV.
V
North river, 59th st. to Spuyten Duyvil
East river, 59th street to 100th street . .
Harlem river ....
256,619
77,743
84,907
13,790,000
3,019,400
3,510,400
1.87
2.58
2 41
Sub-total
$5,932,951
$164,833,530
3.59
VI
Brooklyn
890 844
20,690 100
4 30
VII
Bronx
12,694
726,650
1 74
VIII.
Queens ... .
34,388
293,000
11.72
IX.
Richmond ... .
141,304
5,372,500
2.63
Total $7,012,181 $191,915,780 3.65
GrROUP I
North River, Battery to Fifty-ninth Street
Individual
Assessed percentage
No. valuation; Gross returns
of piers, bulk- income Per^ -^- >
Class piers heads, etc. return cent High Low
1 (a) Shedded piers under long term
lease 54 $81,812,500 $3,072,894 3.7 12.1 1.7
1 (b) Unshedded or open piers under
long term lease 4 2,615,000 76,100 2.9 4.5 1.9
1 (c) Shedded piers occupied by per-
mittees under revocable permits .. 7 8,667,000 700,929 8 11.1 4.9
1 (d) Piers leased to lessees under
property reversion clauses 6 7,911,000 189,731
1 (e) Shedded and unshedded piers
maintained by the city for public
wharfage 15 8,840,000 135,559 1.5 6.1 .8
Total 86 $109,845,500 $4,175,214 3.8
Valuation of unallocated property 7 , 228 , 000
Grand total $117,073,500 3.56
INVESTIGATION OF AFFAIRS OF Jfajw YORK CITY
GROUP II
East River, Battery to Fifty-ninth Street, Manhattan
Class
1 (a) Shedded pier under long term
lease
2 (b) Unshedded or open piers under
long term lease
2 (c) Shedded piers occupied by per-
mittees under revocable permits
2 (d) Piers leased to lessees under
property reversion clauses
2 (e) Shedded piers maintained by
the city for public wharfage
2 (f) Unshedded piers maintained by
the city for public wharfage
Total
Valuation of unallocated property
No.
of
piers
Assessed
valuation :
piers, bulk-
heads, etc.
Gross
income
return
Individual
percentage
returns
cent High Low
37
$16,238
,500
$935
,382
5
.72 9.3
2.33
3
1,214
,000
56
,237
4
.63 11.82
4.37
19
4,665
,000
215
,910
4
.62 14.72
0.46
1
68
,000
2
,022
2
.97
4
1,115
,000
67
,583
6.11 15.25
1.54
11
1,761
,500
61
,328
3
.48 7.12
1.05
75
$25,062,000 $1,338,466
2,378,230
Grand total $27,440,230
4.86
EXHIBIT "B"
Table Showing Rates of Wharfage Charged by 24 Lessees of City-
owned Piers, Compared with Cost of Berth Space Leased
Lessee
Eastern S.S. Corp
Clyde S.S. Co
Clyde S.S. Co
Int. M. M
Int. M. M
Int. M. M
North
river
piers
19
r. 44
45
58
61
,'. " 62
63
69
72
74
. 80
Rent and charge
per berth per day
berths Rent Charge
2 $63 88 $350
2 42 93 225
4 42 93 225
4 58 33 350
4 58 33 350
2 68 75 350
1 57 50 250
2 109 17 350
2 86 27 125
4 62 50 200
4 15 75 300
6 200 00 250
2 15 42 150
ST RIVER
2 55 00 225
2 55 00 300
2 55 00 300
2 66 99 225
2 66 99 225
2 56 43 200
2 16 66 200
4 33 33 150
BROOKLYN
8 15 36 150
8 110 42 275
6 19 44 175
Total
Rental
$127 76
85 86
171 72
233 32
233 32
137 50
57 50
218 34
172 54
250 00
63 00
1,200 00
30 84
110 00
110 00
110 00
133 98
133 98
112 86
33 33
133 66
122 88
883 36
116 64
Charge
$700
450
900
1,400
1,400
700
250
700
250
800
1,200
1,500
300
450
600
600
450
450
400
400
600
1,200
2,200
1,050
Amer. Cuban S.S. Co
Occidental Dock Co
N. Y. Central
France & Canada S.S. Co
Cen. R.R. of N. J
Oriental Nav. Co
Man. Term Co
V 86
. 131st st.
EA
8
g
Spanish Line. .
Munson S.S. Co .
Munson S.S. Co
N. Y. & Cuba Merc
N. Y. & Cuba Merc
10
13
14
D. L. & W. R.R. ...
26
Seaboard & Gulf S.S
32
Maritime S. Co
72
Fabre Line
Luckenbach
. 31st st.
33rd st
U. S. Steel Prod
29th st
24 piers
79
$4,982 39 $18,950
KEPORT OF JOINT LEGISLATIVE COMMITTEE 29
EXHIBIT " C "
Table Showing Rates of Wharfage Charged by Stevedores and
Intermediaries for Public Pier Wharfage, for which the City
Received Prescribed Rates, as Shown
Profit
to inter-
mediary
on
Paid city at city rates Charged ship amount
Pier 1, North river (shedded) Per day Total Per day Total city
United American Line To New York Mari-
time Service. S.S. Bearport, 9/24-14/20,
incl., 21 days. Charges made for 19 days
account of reduction in tonnage stored on
pier. 3,729 net tons $130 52 $2,479 88 $200 $3,800 54%
Pier 69, North river (open)
Cosmopolitan Steamship Co. to Sabbatino &
Co. S.S. Pipestone County (3,434 tons),
10/7/20-10/15/20, 9 days 2017 18153 50 450 150%
Harris, Magill & Co. to Sabbatino & Co., 523
Broadway, S.S. Western Light (3,504 tons),
12/7-12/21/20, 4 days 2052 8208 60 240 200%
James W. Elwell & Co. to United Wharfage &
Storage Co. S.S. Waukau (3,796 tons),
9/22-10/1/20, 9 days 2198 19782 75 675 240%
Sudden & Christensen to Continental Trans-
portation Co. S.S. West Hesseltine (3,466
tons), 2/23/21-3/3/21, 9 days 20 33 182 97 50 450 150%
Cosmopolitan Steamship Co. to Sabbatino &
Co. S.S. Remus (2,931 tons), 8/16/20-
8/24/20, 9 days 1766 15894 50 450 170%
M. H. Tracy & Co. to Richmond Dock Wharf-
age & Water Co. S.S. West Togus (4,447
tons), 9/20/20-9/21/20, 2 days 25 24 50 48 100 200 300%
Pier 94, North river (open)
Cosmopolitan Steamship Co. to Sabbatino &
Co. S.S. Bellingham (3,621 tons), wharfage
charges, 3/1/21-3/8/21, 8 days 21 10 168 80 50 400 137%
Cosmopolitan Steamship Co. to Sabbatino &
Co. S.S. Eastern Light (4, 148 tons), 8/28/20
to 9/7/20, 11 days 23 74 261 14 50 550 108%
95th street, North river (open)
Munson Steamship Line to C. F. Terrence &
Sons. S.S. Ausquam (2,174 tons), 3/25/20
to 3/31/20, 7 days 13 87 97 09 125 875 792%
96th street, North river (open)
Cosmopolitan Shipping Co. to Continental
Transportation Co. S.S. Poughkeepsie
(3,987 tons), 12/10/20-1/9/21, 31 days 2244 69564 50 1,550 128%
Cosmopolitan Shipping Co. to Continental
Transportation Co. S.S. Poughkeepsie
(3,887 tons), 1/10/21-1/19/21, 9 days 2214 20196 50 450 129%
07lh street, North river (open)
Sudden & Christensen to Continental Trans-
portation Co. S.S. Crown City (3,417 tons),
2/7/21-2/15/21, 8 days 2008 16064 50 400 150%
Sudden & Ohristensen to New York Stevedore
& Ballast Co. S.S. Haleakala, 2/26/21-
3/2/21, (4,512 tons), 5 days; 2/19/21-
2/25/21, 7 days 2546 30672 50 600 100%
30 INVESTIGATION OF AFFAIES OF .NEW YORK CITY
Profit
to inter-
mediary
on
Paid city at city rates Charged ship amount
~ paid
Pier 69, East river (open) Per day Total Per day Total city
Black Diamond S.S. Co. to Frank J. Hoey.
S.S. Polybius (5,483 tons), 9/21/20-9/24/20,
4 days 3042 12168 50 200 66%
East 20th street, Manhattan (open)
Cosmopolitan Shipping Co. to Sabbatino & Co.
S.S. Pipestone County (3,434 tons), 7/6/20-
7/9/20, 4 days 2017 8068 50 200 150%
69th street, Brooklyn (open)
Cosmopolitan Steamship Co. to Sabbatino &
Co. S.S. Ossa (3,003 tons), 7/10/20-
7/13/20, 4 days 1802 7298 30 120 66%
Cosmopolitan Steamship Co. to Sabbatino &
Co. S.S. Beliingham (3,621 tons), 8/30/20-
9/24/20, 26 days 21 00 548 60 30 780 44%
Cosmopolitan Steamship Co. to Sabbatino &
Co. S.S. McKeesport (4,122 tons), 7/1/20-
7/7/20, 7 days 2361 16527 50 350 110%
THIRD REPORT
REPORT AND RECOMMENDATIONS ON THE BOARD
OF EDUCATION
February 15, 1922
[31]
REPORT AND RECOMMENDATIONS ON THE BOARD
OF EDUCATION
February 15, 1922.
To the Legislature:
The administration of the public schools of the City is and
for years has been weak and inefficient, and does not measure up
to the reasonable requirements of the school children of the City,
or the expectations and desires of the people of the City, or of
the State which is charged with ultimate responsibility for main-
taining efficient and adequate common schools in every part of
the State.
The deficiencies are apparent.
A. INADEQUATE SCHOOL ACCOMMODATIONS.
In December, 1917, the month before the present Board of
Education took office, there were 746,114 children registered
in the day elementary schools, of whom 34,153 were on part time
and 76,214 on the so-called duplicate form of organization. In
the last month for which figures are now available there were
817,210 children on register in the day elementary schools, of
whom 81.242 were on part time and 194,234 on double session.
In the day high schools there were 58,063 registered in Decem-
ber, 1917, none of whom were on double session and only 1,796
were on part time. In October, 1921, the register had increased
to 82,265 and there were 1,516 children on double session and
33,892 on part time.
These figures show insufficient school accommodations to care
for the growth of school population.
The capacity of new elementary school buildings and additions
opened during the past four years is as follows :
No. of New Buildings No. of Sittings
Therein
1,294
1,380
None
19 203
Year
1918
or Additions Opened
2
1919
4
1920
None
1921 to Dec 6
. .. 16*
Total . 22 21,877
Of the 16 opened in 1921, all but two were opened after September 1st.
2
34 INVESTIGATION OF AFFAIRS OF ^"EW YORK CITY
During the preceding four years, 44 new elementary buildings
or additions were opened, with 52,847 sittings, a better, but still
inadequate showing.
This unfortunate condition is only partly due to lack of appro-
priations. Exasperating delays and .a shifting policy are equally
responsible. The total corporate stock authorizations from Janu-
ary 1, 1910, to June 30, 1921, for school buildings amounted to
$68,744,732.11, while the expenditures during the same period
amounted to only $46,092,839.88. Fifteen million of this
authorization was made in 1921, but the ten million authoriza-
tion of earlier years was revoked on December 30, 1918, without
the expenditure of any part of it in the meantime, and
was subsequently appropriated for the same purposes for which
it was originally designed. This resulted in holding up the build-
ing program at the time of its greatest need. A detailed state-
ment of the authorizations and cash expenditure from 1910 to
1921 will be found on page 38 of the appendix.
It will be noted that the expenditures of the three and a half
years, 1918 to July, 1921, were but $15,224,331.97, which, in
view of the depreciated value of the dollar, represents not more
than $8,000,000 in building value on the basis of 1910 to 1917,
or about one-half of the previous four-year totals.
The average annual authorization for the eleven and a half
years covered in the annexed table was $5,977,802.79 and the
average annual expenditure $4,008,073.03.
The inadequacy of school buildings has inevitably resulted in
(1) Inadequate instruction, keeping scholars on part time.
(2) Overcrowding of the school buildings with resulting danr
ger to sanitation and health.
B. FIRE HAZARDS.
In August, 1921, there were 7,353 violations of fire prevention
rules recorded against 496 of the City's 695 school build-
ings. The estimated cost of removing these violations is about
$4,500,000. Some of the violations are serious, as, for example,
stairways that are not enclosed with fire and smoke-proof parti-
REPORT OF JOINT LEGISLATIVE COMMITTEE 35
tions and not provided with self-closing doors ; interior fire alarm
systems that do not work; wooden and not self-closing fireproof
doors along the line of exit stairways ; no hand fire extinguishers ;
and storage of dangerously inflammable materials in non-fireproof
rooms or compartments. The Superintendent of School Build-
ings wrote the Board of Education, March 23, 1921, as follows:
" This with the continued growth of the schools and con-
sequent overcrowding and congestion causes me great uneasi-
ness and distress of mind. If the fire prevention work was
and is required for schools under normal conditions, how
much more important must it he when a building contains
quite one-half or more in excess of the normal . . . why
paint and renovate the interior of a building when there are
essential items of fire prevention work to be performed which
would actually operate to safeguard life and lessen fire
risk ? "
The total authorizations and expenditures for fire prevention
work since September 16, 1904, is as follows:
Date of Amount of
Authorization Authorization Expenditures Balance
Sept. 16, 1904 $300, 000 00 $300, 000 00
550, 000 00 550, 000 00
April 3, 1908 1, 000, 000 00 1, 000, 000 00
June 3, 1910 450, 000 00 450, 000 00
July 17,1911 450,00000 447,66659 $2,33341
Nov. 19,1915 250,00000 250,00000
July 7,1916 250,00000 250,00000
April 20, 1917 250,000 00 240,660 85 9,339 15
April 22,1921 250,00000 250,00000
C. NEGLIGENT ADMINISTRATION".
Other deficiencies of administration appear from the failure
to repair the education building, and the condition of by-laws and
minutes of the Board of Education. In February, 1918, the
seventh, eighth and ninth floors of the Hall of the Board of Edu-
cation, at 500 Park Avenue, housing the executive offices of the
Board, were burned out. Bids for the rebuilding of these floors
were not opened until December 7, 1921, nearly four years after
the fire. During this interval the work of the Board has been
seriously interfered with because of compulsory vacancy of the
three top floors of its building. The Bureau of School Buildings
had to be moved to inadequate quarters in the Municipal Build-
ing, several miles away from the other offices of the Board. The
36 INVESTIGATION OF AFFAIRS OF ,NEW YORK CITY
delay in agreeing on new plans, in securing an appropriation and
in letting the contract is open to serious criticism. No business
corporation would tolerate such methods. See testimony of
President of Board of Education, vol. 3, p. 1321.
The law of 1917 so changed the organization of the school sys-
tem that a complete revision of the by-laws was necessary in order
to make them conform with the new statute. This revision has
not been made. A few sections were revised but the bulk of the
by-laws was still in the form of a large octavo volume published
in 1914 with hundreds of amendment slips pasted in, many of
which antedate the law of 1917.
The minutes of Board meetings are records of great im-
portance to teachers, board members, board officers and city
authorities, as they have the force of law within the scope of the
powers delegated to the Board of Education by the Legislature.
The last volume of minutes to be furnished with a printed index
is that for 1915. The minutes of board meetings are not or-
dinarily available until two months after the meeting.
Such conditions could not exist with a capable Board. They
have failed not only in matters wholly in their control, but they
show no capacity to secure effective administration through the
co-operation of other governmental agencies on which they de-
pend, or to secure the enactment of better laws by inspiring public
confidence and arousing public opinion. They have shown little
or no capacity for leadership for many years in the discharge of
the important trust confided to them.
Unsound Legislation.
Responsibility for such conditions may not be easily appor-
tioned. It doubtless rests primarily on the system of making
purely political appointments to the Board of Education. Such
appointments are made without any check of non-partisan ap-
proval or confirmation. Each incoming mayor seeks, and usually
gains, a large degree of political control over the Board of Educa-
tion. The members of the present Board were all appointed by
the present Mayor under the amendment of 1917. Such political
appointments are in strict accord with the ancient plan of dele-
gating educational functions to localities, but the State has
largely outgrown and changed the system by increasing State
power over local administration, while furnishing State aid to
meet new requirements imposed by law. The old system is not
REPORT OF JOIXT LEGISLATIVE COMMITTEE 37
adapted in principle to a municipality like New York. State
jurisdiction over schools is exercised by the University of the
State, which is non-partisan in its organization and spirit. Some
plan should be devised for the creation of an equally non-partisan
and representative body in the City.
Apart from this basic fault, it is desirable to review some
specific faults of organization, which should be removed to give
assurance that a competent board could successfully discharge
its duty.
1. COMPLICATED AND ANTIQUATED PROVISIONS
OF LAW REQUIRING THE CO-OPERATION OF MANY
OTHER BRANCHES OF THE CITY GOVERNMENT IN
BUILDING OPERATIONS WITH RESULTING DELAYS,
OFTEN AMOUNTING TO A VETO OF A BUILDING
PROJECT.
The first and most important of these objectionable provisions
is the provision of law making the Board of Education dependent
upon the action of the Board of Estimate and the Sinking Fund
Commission for appropriations and acquisitions of sites for
school houses. There is a general concurrence in the necessity of
making the Board of Education independent in this respect. It
may therefore be assumed that there is but one opinion upon the
subject, and that the necessity is great. The Committee inquired
with particularity as to the steps required to be taken to build a
school house, and found that there were at least twenty-seven,
each one involving considerable delay and the whole practice
likely to discourage those who were engaged in the undertaking.
Most of them are unnecessary for the protection of the City's
interest, and hinder the prompt building of school houses. An
exhibit showing these steps in detail will be found on page 36
of the appendix.
In two instances it was found that twenty years or more had
elapsed from the time the recommendation for a new building
was made by a local school board and the time when the building
was opened for use. P. S. No. 54, Brooklyn, for example, was
recommended by the school board of Brooklyn in 1901 ; the con-
tract date for its completion is September, 1922.
Examination of the record of some twenty schools on the cur--
rent building program shows that plans and specifications were
before the Board of Estimate in one instance for 356 days, an-
38 INVESTIGATION OF AFFAI?*? OF NEW YOEK CITY
other for 211 days, and in eight cases for more than 50 days.
This did not take into account the time between the return by
the Board of Estimate and a resubmission by the Board of Edu-
cation. In one case the same matter was four times before the
Board of Estimate. In four other cases the same matter was
before the Board of Estimate three times.
2. STATUTORY POWERS PROPERLY BELONGING
TO THE BOARD OF EDUCATION NOW VESTED IN
BODIES OR OFFICIALS NOMINALLY SUBORDINATE
TO THE BOARD BUT IN FACT SUPERIOR IN RESPECT
OF SUCH POWERS.
The superintendent of schools, the Board of Superintendents,
and the Bureau of Compulsory Education, all have a fixed tenure
of office, and although chosen by the Board, possess important
powers of administration which are exercised independently of
and often in opposition to the desires of the Board itself.
It is unnecessary to enumerate these important powers which
are readily referred to in the statute, and have been frequently
the cause of conflict between the boards and officials named and
the Board of Education. Many of these powers are among the
most important exercised in the administration of the schools.
3. FREQUENT CHANGES AND CONFLICT OF LAWS
GOVERNING THE ADMINISTRATION OF SCHOOLS.
The Board of Education originally consisted of nineteen mem-
bers. It was changed in 1901 to forty-six members, and in 1917
to seven members. The charter was radically revised in 1897
and in 1901, and its provisions extensively modified by amend-
ments to the State Education Law in 1917, each change involving
important changes in the plan of administration of the schools
and their relation to other city agencies and the State. A com-
parative statement of the principal changes effected by the statute
of 1917 in the law of 1901 will be found on page 22 of the
appendix.
Under the act of 1917 conflicts have arisen by reason of the
uncertainty of the law between the Board of Education and the
Commissioner of Education at Albany, between the Board of
Education and the municipal authorities relative to their respect-
ive powers, and between the Board of Education and the superin-
REPORT OF JOINT LEGISLATIVE COMMITTEE 39
tenclent of schools, if not between the Board of Education and
the Board of Superintendents and associate superintendents.
There has been a failure to concentrate in clear and unmis-
takable language the full responsibility for the administration of
the public school system on the Board of Education, the municipal
authorities, or the State. Groping for a remedy they have found
none because the fundamental error of appointing a political
Board of Education has remained.
Finances.
Fortunately the financial statement for education in the City
is not complicated. The expenditures since 1910 have been as
follows :
Year Expenditures.
1910 $28,456,945 08
1911 28,958,179 29
1912 33,791,974 40
1913 35,481,641 12
1914 38,185,495 90
1915 39,797,960 64
1916 39,708,764 22
1917 41,101,074 41
1918 43,884,893 59
1919 45,490,121 68
1920 66,194,668 04
1921 (first 6 mos.) 44,828,326 69
1922 (budget) *88,798,546 81
The normal increase for the years 1920, 1921 and 1922 has
been augmented by the Lockwood-Donohue act in the sum of
$30,000,000. This has been devoted to the pay of teachers. The
annual normal increase may be roughly taken as $2,000,000.
The apportionment of State moneys to the City since 1914 has
been as follows :
* Including $18,097,534.51 from the State.
40 INVESTIGATION OF AFFAIKS OF IN~EW YORK CITY
Amount Apportioned
Year to ^ ie &*!!
1914 $1,923,025 00
1915 '.'.'.'.'.'.'.'.'. 2,115,679 73
3916 2,220,730 03
1917 2,414,837 16
1918 2,321,191 13
1919 2.700.657 10
1920 5,025,570 17
1921 . . 16,938.023 R/.
1922 *18,097,534 51
The increase of apportionment for 1922 over 1919, the period
during which the mandatory increase due to legislation has oc-
curred, has been about $15,000,000, or one-half of the amount of
the increased charge due to these laws.
The City complains of the increase effected by law. As educa-
tion is a State function, although commonly delegated to munici-
palities, it would appear that when the State interferes to increase
the cost of education in so considerable an amount, it should pro-
vide ways and means for defraying such additional expenses with-
out embarrassment to the municipalities. The State's taxing
power is unlimited, and it is a matter of comparative indifference
to any part of the State whether the funds for education are
raised by State or local tax.
The constitution limits the debt incurring power of cities to ten
per cent of the assessed value of real estate, and the taxing power
to two per cent of the assessed value of real and personal property.
These limitations which are proper and useful, were enacted with
reference to the normal expense for education. Such increase in
cost is the result of a change of policy in the entire State as to the
standard of teaching, which it is expected will be much improved
!;y making the teachers' profession more attractive. It is true that
i hip augmented cost was favored by substantially all the members
of the legislature from the City, and the present administration of
the City claims to have favored it ; but it was done by .State author-
ity, and the Committee finds no evidence tending to show that the
additional expense would in fact have been incurred in the absence
of legislative enactment. It doubtless seems strange to one un-
familiar with the real financial situation of the City and such an
Estimated.
REPORT OF JOINT LEGISLATIVE COMMITTEE 41
increased charge du ;ukl he a source of embarrassment. The City
lias a debt incurring capacity of more than a billion dollars, a
taxing capacity of more than two hundred million dollars, and an
unencumbered income of more than sixty millions. But by reason
of the course of past and present administrations, the City has been
for sonic years past near its debt limit, if it has not exceeded it,
and grave question exists as to its having exceeded its tax limit in
the last two annual assessments.
In preparing the budget for 1921, the City under claim of neces-
sity, omitted $27,000,000 from the school appropriation, and met
it afterwards by special revenue bonds, and other devices, throwing
most of the charge over on to the year 1922. The Comptroller ad-
vised striking ten million dollars from the 1922 budget for educa-
tion on the ground that otherwise the tax imposed would exceed
the constitutional limit. It is unadvisable at present to increase
charges upon the City and it would seem to be desirable for the
State to establish a plan of appropriations increasing annually
until it is sufficient to meet the additional charge for education it
has created since 1920.
While this report is confined to matters relating to the City of
!N"ew York, there is a like situation in other parts of the State, and
the problem of providing for the cost of education under these
laws will require solution in other important muncipalities. It is
therefore a State as well as a City issue.
The legislature has from time to time fixed a mandatory tax for
school purposes in the City. It fixed the tax at four mills in 1898,
three mills in 1903, and 4.9 mills in 1917. These charges were
made in the exercise of State authority to insure the maintenance
of schools, but they may be regarded as representing a minimum
below which the cost of education may not be reduced rather than
as an attempt to increase the expenditure. For the most part the
City has made considerable and in many instances large appropria-
tions for schools in excess of the mandatory tax.
NON-POLITICAL BOARD OF EDUCATION.
The problem of securing a Board of Education for the City
which shall stand for education free from political considerations,
is the fundamental one. As the University of the State is the
State-wide instrument of control in education the members of
the University of the State resident in the City, now four in
number, can with the Mayor who should be chairman of the
42 INVESTIGATION OF AFFAIRS OF NEW YOEK CITY
Commission, be drafted into service as a Commission to appoint
members of the City Board of Education. This will give local
recognition by requiring all members of the Commission to reside
in the city. By taking over as members of the Commission resi-
dents of the city who are members of the Board of Regents it
will insure the performance of the State's obligation and duty
in education, now greatly increased by the added burden of cost
which the State assumes. But more important than all else, it
will take politics out of schools.
RECOMMENDATIONS
1. The Committee recommends that the Board of Education of
the City of New York consist of members appointed by the Com-
mission as provided in this report.
2. That the Board of Education be granted complete inde-
pendence from all municipal control in the acquisition of real
property for school purposes, by purchase, condemnation, lease
or otherwise, within the limit of the funds available therefor.
3. That the Board of Education be granted complete inde-
pendence from all municipal control in the construction, alteration
and repair of school buildings, provided that its superintendent of
school buildings, before starting work, certify in writing that the
plans and specifications comply with the building and electrical
codes and the laws of the State; and provided further that
occupancy shall not be permitted until the superintendent of
school buildings shall have certified that the building as com-
pleted complies with the building and electrical codes and the
laws of the State, but without disturbing the City's jurisdiction
as to fire prevention.
4. That the Board of Education be granted complete inde-
pendence from all municipal control in the administration and
expenditure of all school moneys, subject only to audit by the
Comptroller of the City for the purpose of preventing fraud or
error.
5. That the City be required to appropriate in its annual
budget amount which together with the school moneys which are
apportioned to the City by the State, will equal the budget appro-
priation for schools in the City for the year 1922 ($88,798,-
546.81) plus an annual increase of two million dollars as repre-
senting the normal increase of cost ; that the present authorization
KEPOET OF JOINT LEGISLATIVE COMMITTEE 43
for building school houses be not revoked and that at least
$6,000,000 be authorized annually for this purpose.
6. That the State provide for a graduated increased appro-
priation for schools until the amount apportioned for the City
of New York shall be increased fifteen million dollars over the
amount apportioned in 1922.
7. That sections of the greater New York Charter inconsistent
with the provisions of the education law be repealed.
And the Committee further recommends that as soon as the
Board of Education is reconstituted under the foregoing recom-
mendations that the powers of the Board be increased as follows :
8. That the Board of Education be constituted the fiscal and
policy determining head of the school system with power to dele-
gate authority to the Superintendent of Schools, as it may deem
wise.
9. That the Board of Education be granted power to establish,
abolish or consolidate such boards, bureaus and divisions as it
may deem necessary excepting only the Board of Examiners.
10. That the Superintendent of Schools and all other officers
and employees derive their power and authority from the by-laws
of the Board of Education, subject only to the provisions of the
Education Law.
Respectfully submitted,
SCHUYLER M. MEYER, Chairman.
THEODORE DOUGLAS ROBINSON.
FREDERICK W. KAVANAUGH.
MAXWELL S. HARRIS,
SIMON L. ADLER.
SOL ULLMAN.
JOHN R. YALE.
WALTER W. WESTALL.
ELON R. BROWN, Counsel.
I subscribe to the Committee's recommendations except that I
do not believe that the power of appointment of members of the
Board of Education should be exercised by officials elected or
appointed outside of the City of New York. Irrespective of
their residence, the Regents are elected by the Legislature. I
favor confirmation of appointments by the Mayor to the Board
of Education by either the Board of Aldermen or by the Board
of Finance suggested in the Committee's first report.
THEODORE STITT.
APPENDIX
EDUCATION UNDER THE GREATER NEW YORK CHARTER.
The union into one municipality under the corporate name of
the City of New York of " the various communities lying in and
about New York harbor, including the City and County of New
York, the City of Brooklyn and the County of Kings, the County
of Richmond and part of the County of Queens," effected by
Chapter 378 of the Laws of 1897, brought together into one
fabric the various different threads of educational policy which
had been spun by the separate statutory provisions enacted by
the State Legislature for the benefit of the several communities.
These had been and were of the most diverse character, ancl
the recognition in the new charter of many of these local peculiari-
ties, in response doubtless to strong local pressure to perpetuate
a time-honored custom or to assure a continuance in office to some
local officer, made the educational sections of the new instrument
complex and not simple affairs.
At the time of consolidation, for example, the old City of New
York had a Board of Education of 21 members appointed by the
Mayor. The City of Brooklyn had a Board of Education of 45
members appointed by the Mayor. In what became the Boroughs
of Queens and Richmond, there were 'many independent school
organizations based on town or school district lines.
The new charter sought to recognize local .sentiment. It con-
tinued the Board of Education of the former City of New York
as the School Board for the Boroughs of Manhattan and The
Bronx. It continued the Board of Education of the former City
of Brooklyn as the School Board for the Borough of Brooklyn,
and it substituted in each of the new Boroughs of Queens and
Richmond, a Borough School Board of 9 members for the various
pre-existing local school organizations. This arrangement gave
each borough a School Board with very considerable powers over
the schools of the borough. In addition, provision was made for
a Board of Education of 19 members, consisting of the 4 Chair-
men of the 4 Borough School Boards, 10 delegates elected from
[45]
46 INVESTIGATION OF AFFAIES OF ~N"EW YORK CITY
its membership by the School Board of Manhattan and The
Bronx, and 5 delegates chosen similarly by the School Board of
Brooklyn. This Board of Education was constituted a separate
corporation and was made the head of the Department of Educa-
tion, set up as one of the administrative departments of the City.
The new Board did not enjoy the same degree of independence
as its predecessors. On the administrative side, many powers
previously possessed by the Boards of Education were given to
the Borough School Boards. On the financial side, there had
been a gradual growing away from the original idea, whereby
local school authorities were independent of municipal author-
ities. The Act of 1851, for example, had given the Board of
Education corporate powers and had invested it with full control
of the common schools with power to take and hold property,
secure proper accountability in the expenditure of school moneys
and administer the funds derived from the city and State. No
municipal control was incidental thereto, for the supervisors of
the city and county were required to raise, for educational pur-
poses, certain sums easily ascertainable under the law, and " such
additional sum or sums as the Board of Education * * *
shall have reported to be necessary." This gave the Board of
Education a position of peculiar independence in relation to the
fiscal authorities of the City of New York, but during the next
46 years, this independence was steadily and increasingly
impaired.
The Board of Education of 1898 had very little financial
power. It was made the head of a department of the city gov-
ernment, and by section 1059, the City was given the power to
determine the amount of money to be allowed from the tax levy
for the support of the schools. About the only financial functions
remaining to the Board were the allotment of funds to the
boroughs on the basis of school population and the number of
teachers employed, and the control of the special school fund.
The educational chapter of the charter of 1897 represents an
attempt, similar to attempts made before and since, to reconcile
two hopelessly conflicting theories. The schools cannot be both
independent and subject to municipal control, and yet the Legis-
lature has repeatedly enacted laws by which it has endeavored to
make this paradox work. The school authorities have fought to
preserve every right they ever enjoyed and the city authorities
have sought, with equal vigor, to supervise and control the expendi-
REPORT OF JOINT LEGISLATIVE COMMITTEE 47
tare of city funds appropriated by them for school purposes. A
clear, consistent and uncompromising enactment by the Legisla-
ture, settling the many points of controversy, would go far to
improve school conditions in New York City.
The charter of 1897 was soon radically revised. Its successor
was Chapter 466 of the Laws of 1901, and the educational chap-
ter of that instrument was until 1917 the basis for the administra-
tion of the City's public schools.
The Department of Education was continued as one of the
administrative departments of the City, and the Board of Edu-
cation was placed at its head. The former Borough School Boards
were abolished and the size of the Board of Education increased,
to provide for borough representation. The new Board consisted
of 46 members, appointed by the Mayor for five year terms, as
follows :
22 residents of Manhattan.
4 residents of The Bronx.
14 residents of Brooklyn.
4 residents of Queens.
2 residents of Richmond.
The Board was given corporate privileges. Among other sig-
nificant provisions of the new law were the following :
The Board of Education was to succeed to all the powers
of the former Board of Education and Borough School
Boards.
The Board of Education was to administer all moneys
I available for educational purposes.
The Board of Education had the power to lease property
and make contracts.
The Board of Education had the power to appoint certain
officers and clerks and to fix their salaries, and to appoint
and fix the salaries above certain minimums of members of
the teaching and supervising force.
There was to be a Board of Superintendents, consisting
of the City Superintendent and 8 Associate Superintendents,
the latter to consist of the 4 Borough Superintendents and of
4 persons selected from the Associate Bcrough Superintend-
ents, each to hold office until the expiration of the term for
which he had originally been appointed.
48 INVESTIGATION OF AFFAIRS OF ^"EW YOKK CITY
There were to be 26 District Superintendents, including
all the Associate Borough Superintendents not appointed to
the Board of Superintendents.
There were to be 46 local school boards, each consisting
of a member of the Board of Education assigned by the
President of the Board, the District Superintendent of the
district and 5 persons appointed by the Borough President.
There was to be a Board of Examiners, to examine
candidates for teachers' licenses.
The City was required to supply the Board of Education
with funds for school purposes annually, amounting to not
less than 4 mills on the dollar of assessed valuation.
The Department of Einance was given authority to audit
the Board's accounts.
The provisions of this law respecting the organization of the
school system remained substantially the same during the entire
life of the educational section of the charter, but the powers of
the Board of Education were increasingly impaired. Special sal-
ary laws were passed by the Legislature, which in effect deprived
the Board of practically all control over teachers' salaries. By
Chapter 43 of the Laws of 1903, the amount which the City
must annually make available for school purposes was reduced
from 4 mills to 3 mills contemporaneously with an increase in the
assessed valuation of such magnitude that the yield of the 3-mill
tax was greater than the yield of the 4-mill tax. Both amounts
were, however, inadequate, so that the Board of Estimate and
Apportionment substantially controlled the Board of Education's
finances by conditioning additional appropriations upon the obser-
vance of the Board of Estimate's rules and regulations regarding
the segregation of appropriations and accounting control. The
tendency grew to regard the Department of Education as a regu-
lar department of the city government and the Legislature made
little, if any, effort to rcal\w in its contemporary legislation the
ideal of educational independence which had been characteristic
of earlier school legislation (notably Chapter 386 of the Laws of
1851), and such measure of independence as was contemplated in
the charter of 1901 was, as indicated above, greatly reduced by
subsequent legislation or by acquiescence.
By 1917, the Department of Education was functioning very
much as a regular city department. The 3-mill allowance was so
REPORT OF JOINT LEGISLATIVE COMMITTEE 49
inadequate that the Board of Education would have been help-
less had the City not granted additional funds to run the schools^
The budget for 1917, for example, appropriated $41,430,447.49
for the general and special school funds, while the amount
yielded by the 3-mill tax and included in the budget for that year,
was only $25,753,057.53. The Department of Education acted
with and depended upon other city authorities, such as the Cor-
poration Counsel, the Department of Finance, Board of Estimate
and Apportionment and the Sinking Fund Commission, in connec-
tion with its contracts, leases, real estate transactions and pro-
posals for the construction of new schools. It is probably safe to
say that what independence the Board of Education may have
had under a strict interpretation of the law was not exercised.
The situation was radically changed by the enactment of Chap-
ter 786 of the Laws of 1917, which amended the State Education
Law, by providing for Boards of Education in the several cities
of the State and which repealed nearly all the sections of the New
York City Charter with respect to the public school system. The
advocates of this legislation contended that public education in
cities was as much a matter of State concern as in villages and
towns, and that the many varying laws controlling school systems
should be brought together and made an integral part of the State
Education Law.
The consolidation and unification which was effected, however,
is strikingly similar to the kind of consolidation effected by the
first charter of the Greater City, where the customs and machin-
ery of the two cities of New York and Brooklyn were, to a con-
siderable extent, perpetuated in the new instrument. The State
Law of 1917 provides for about as many different kinds of Board?
of Education as there were before, and it preserves the right?
enjoyed by certain communities and jealously defended by them
It has the virtue of including, in one article, most of the provisions
of law relative to city schools, but it does not provide a consistent;
or a uniform system of control.
50
INVESTIGATION OF AFFAIRS OF [EW YORK CITY
EDUCATION UNDER THE PROVISIONS OF CHAPTER 786, LAWS OF
1917, AS AMENDED THROUGH 1921.
It is not necessary in the present connection to comment on
the patchwork character of this law. The powers, duties and
composition of boards of education in the larger cities of the
State differ amazingly, and the organization of the school sys-
tems left in some cities to local control is in New York pre-
scribed with regard to certain phases such as the Board of
Superintendents and the Bureau of Compulsory Education. It
is enough to compare the conditions under the charter of 1901
as it stood in 1917, with the present legislative provisions.
The following analysis of the more important provisions of
both statutes is submitted in parallel columns to facilitate
comparison :
Section Charter Provisions
1055 School property vested in city
under control of Board of
Education.
1059 Board of Estimate and Board
of Aldermen given power to
raise by tax amounts re-
quired for school purposes, as
called for by annual city
budget.
1060 General and special school
funds established and Board
of Education given power to
administer " all moneys . . .
available for educational pur-
poses in the city of New
York."
1061 Board of Education created to
consist of 46 unpaid mem-
bers appointed by the mayor
for 5-year terms: 22 from
Manhattan, 4 from the
Bronx, 14 from Brooklyn, 4
from Queens, 2 from Rich-
mond.
1062 Board of Education given cor-
porate powers.
1064 Board of Education to be rep-
resentative of entire school
system. By Sept. 15th to
submit annually to Board of
Estimate a detailed estimate
Section State Law Provisions
868-3 Charter sec. 1055 not re-
pealed. Board of Education
given care, custody and con-
trol of all city school property.
Charter sec. 1059 repealed.
877-7 Charter sec. 1060 repealed.
General and special school
funds defined and established,
and Board of Education given
power to administer " all
moneys . . . available for edu-
cational purposes in the city,"
subject to audit by the Depart-
ment of Finance.
865-866 Charter sec. 1061 repealed.
Board of Education created to
consist of seven members: two
from each of the two boroughs
with the largest population,
and one from each of the other
three appointed by the mayor
for seven-year terms.
300 Boards of education in cities
made corporations.
877-1 Charter sec. 1064 repealed.
Board of Education by Septem-
ber 1st to submit annual esti-
mate for ensuing fiscal year to
Board of Estimate and Appor-
REPORT OF JOINT LEGISLATIVE COMMITTEE
51
Section Charter Provisions
of moneys required for next
calendar year. Board of Esti-
mate required to appropriate
for general school fund not
less than the yield of 3 mills.
Board of Education to ad-
minister all mone/s subject
to audit by Department of
Finance.
1066 Board of Education empowered
to dispose of personal prop-
erty.
1067 Board of Education empowered
to appoint secretary, super-
intendent of school buildings,
superintendent of school sup-
plies, city superintendent of
schools, supervisor of lec-
tures, director and assist-
ant director of reference
and research, and one or
more auditors; also a chief
clerk and " such other offi-
cers, clerks or subordinates
as it may deem necessary . . .
and as are provided for by
the proper appropriations."
These appointees removable
for cause by three-fourths
vote.
1068 Board of Education empowered
to enact by-laws, rules and
regulations for the transac-
tion of its business and " de-
fining the duties of the city
superintendent of schools, the
director and assistant director
of the Division of Reference
and Research, the superin-
tendent of school buildings.
Section State Law Provisions
877-7 tionment, which is required to
appropriate the amount of such
estimate up to the yield of 4.9
mills. Board of Estimate au-
thorized to make additional ap-
propriations. Board of Edu-
cation empowered to adminis-
ter all moneys available for
educational purposes subject
to audit by Department of
877-8 Finance. Board of Education
may submit special estimates
to meet emergencies.
Charter sec. 1066 not repealed.
868 Charter sec. 1067 repealed. Pow-
ers and duties of Board of
Education as follows: To per-
form any duty imposed by
State law or regulation of the
University of the State of New
York or Commissioner of Edu-
cation; to create, abolish,
maintain and consolidate such
positions, divisions, boards, or
bureaus as it deems necessary;
to appoint a superintendent of
schools, such associate district
or other superintendents, etc.,
as it deems necessary, and to
determine their duties, except
as otherwise prescribed by the
Education Law; to appoint
872 district superintendents, di-
rectors, supervisors, principals,
teachers and all other members
of the teaching and supervis-
ing staff upon recommen-
dation of the Board of Super-
intendents ( except associate
superintendents and exam-
iners) and to appoint asso-
ciate superintendents and ex-
aminers and all other em-
ployees (except members of the
teaching and supervising staff,
the appointment of whom, must
be on recommendation of
Board of Superintendents).
868-9 Charter see. 1068 repealed.
Board of Education empowered
to prescribe such regulations
and by-laws as may be neces-
sary to make effectual the pro-
visions of this chapter, etc.
INVESTIGATION OF AFFAIRS OF HEW YORK CITY
Section Charter Provisions
the superintendent of school
supplies, of its auditor or au-
ditors, its clerks and subordi-
nates," etc.
1069 Additional powers of Board of
Education :
1. To establish and conduct
elementary schools, kinder-
gartens, manual training
schools, trade schools,
truant schools, evening
schools and vacation
schools.
2. To maintain free lectures
and courses of instruction
for the people of the city
of New York.
3. To provide special classes
for instruction in English
to foreigners.
4. To provide " one or more
high schools and training
schools."
5. To establish and conduct
playgrounds in connection
with the public schools.
6. To establish new schools
and discontinue or consoli-
date any schools.
7. To make contracts with ap-
proval of board of esti-
mate for transportation of
pupils.
8. To establish a bureau
of compulsory education,
school census and child
welfare. " On the nomina-
tion of the board of super-
intendents the board of
education shall have power
to appoint a director and
an assistant director " and
other employees, and fix
their salaries within the
proper appropriation.
1070 Secretary to have charge of
rooms, books, papers, etc., of
the board and to perform
" such other duties as may
be required by its members
or committees."
1071 Board of Education empowered
to establish branch offices of
the bureaus of school build-
ings and school supplies in
the several boroughs, super-
intendent of school buildings
to be executive officer of the
board " in respect to all mat-
ters relating to the bureau of
buildings."
Section State Law Provisions
868-5 Charter sec. 1069 repealed ex-
cept subdivision 8. Board of
Education has power to estab-
lish and maintain such free ele-
mentary schools, high schools,
training schools, vocational
and industrial schools, kinder-
gartens, technical schools, night
schools, part-time or continua-
tion schools, vacation schools,
schools for adults, open air
schools, schools for the men-
tally and physically defective
children, or such other schools
or classes as it may deem
868-6 necessary, and to establish and
maintain libraries, public lec-
ture courses, playgrounds, rec-
reation centers, social centers
and reading rooms.
871 -a Bureau of compulsory educa-
tion, school census and child,
welfare made mandatory, em-
ployees continued in office dur-
ing good behavior and remov-
able only for cause.
Charter sec. 1070 repealed.
Charter sec. 1071 repealed.
REPORT OF JOINT LEGISLATIVE COMMITTEE
53
Section Charter Provisions
1073 All plans for new school build-
ings, additions and structural
alterations must be approved
by superintendent of school
buildings, who shall submit
such plans to Board of Edu-
cation, whose action shall be
final.
1074 Janitors shall be appointed by
the Board of Education.
107o Board of Education shall pro-
vide for purchase of all books,
supplies, etc., and shall have
power to enact by-laws and
resolutions for government of
superintendent of supplies,
winch by-laws, etc., shall pro-
vide that all supplies as far
as possible shall be obtained
by contract after public let-
ting in accordance with sec-
tion 419.
1076 Bureau under superintendent of
supplies to be subject to rules
and regulations of Board of
Education. Superintendent of
supplies may appoint such
deputies and other subordi-
nates as the by-laws of the
Board of Education may au-
thorize. He shall be the ex-
ecutive officer of the board in
respect of supplies, printing,
transportation of pupils and
such other matters as may be
assigned him by the board.
1077 City superintendent shall have
right of visitation and in-
quiry in all schools of the city
and shall report to the board
thereon. He shall have a seat
and a right to speak in the
board meetings, but no vote.
1078 City superintendent shall visit
schools and, subject to by-
laws, prescribe forms and
regulations for conducting
school business. Under direc-
tion of Board of Education
he shall enforce Compulsory
Education Law. He may ap-
point clerks as authorized by
the Board of Education, and
assign, suspend or discharge
them subject to appeal to the
Board of Education. He shall
Section ISlate Law Provisions
Charter sec. 1073 repealed.
Charter sec. 1074 repealed.
868-4 Charter sec. 1075 repealed.
Board of Education to secure
necessary books, supplies, etc.
Charter sec. 1076 repealed.
870-1 Charter sees. 1077 and 1078
repealed. Superintendent of
schools shall have power, sub-
ject to by-laws, to enforce all
rules, etc., relating to the man-
agement of the schools, etc. ; to
be the chief executive officer
of the Board of Education and
the educational system; to
have a seat and voice but not
a vote at board meetings; to
4 have supervision and direction
of all persons employed by the
Board of Education; to trans-
fer teachers on recommenda-
tion of board of superintend-
ents; to suspend any employee
until next meeting of Board
5 of Education; to have super-
vision and direction over the
enforcement of courses of study
and all the other educational
activities under control of the
Board of Education; to issue
54
INVESTIGATION OF AFFAIBS OF
YORK CITY
Section Charter Provisions
assign associate and district
superintendents subject to by-
laws. Twenty-three district
superintendents to be as-
signed, each one to two local
school board districts.
1079 Board of superintendents estab-
lished, consisting of city su-
perintendent and eight asso-
ciate superintendents ap-
pointed by the Board of Edu-
cation for six years. Board
of Education empowered to
pa&s by-laws regulating du-
ties of city superintendent
and board of superintendents.
There shall be twenty-six dis-
trict superintendents to be
appointed by Board of Edu-
cation for six years on nomi-
nation of board of superin-
tendents. Board of Education
empowered to appoint direct-
ors of special branches for
six years on nomination by
board of superintendents.
1032 Board of superintendents, sub-
ject to approval of Board of
Education, shall establish
rules governing promotion,
transfer, etc., of pupils.
1083 Board of Education shall, upon
recommendation of board of
superintendents, approve text
books, etc.
1084 Board of Education shall have
power to change grades and
adopt and modify courses of
study, but such changes must
first be presented to board of
superintendents and, in case
of adverse report by latter,
change shall not be effective
unless passed by two-thirds
vote.
1087 Creation of forty-six local school
board districts and local
school boards of five persons
appointed by borough presi-
dent, district superintendent
and Board of Education mem-
ber.
Section State Law Provisions
licenses to teachers on recom-
mendation of board of exam-
870-6 iners; to have general super-
871 vision of bureau of compulsory
education, school census and
child welfare.
869 Charter sec. 1079 repealed. Board
of superintendents continued,
consisting of superintendent of
schools and eight associate su-
perintendents, superintendent
to be chairman. It has power
870-2 to prepare the content of each
course of study authorized by
Board of Education, subject to
approval by Board of Educa-
870-4 tion; to recommend text books;
to recommend to superintend-
ent the transfer of teachers.
870-5 Charter sec. 1082 repealed.
Board of superintendents to
have power to make rules and
regulations for promotion and
graduation of pupils.
868-8 Charter sec. 1083 repealed.
Board of Education has power
to authorize and determine
text books from lists recom-
mended by board of superin-
tendents.
868-7 Charter sec. 1084 repealed.
Board of Education has power
to authorize the general
courses of study and to ap-
prove the content of such
courses before they become
operative.
873 Charter sec. 1087 repealed. Local
school board districts contin-
ued, but Board of Education
given power to modify bound-
aries, consolidate two or more
and establish new ones. Local
school boards to consist of five
persons appointed by the bor-
ough president, a member of
the Board of Education desig-
nated by the board, and a dis-
trict superintendent assigned
by the city superintendent.
REPORT OF JOINT LEGISLATIVE COMMITTEE
55
Section Charter Provisions
1088 Duties of local school boards:
1. To visit and inspect schools
at least once each quarter.
2. To report on needs for new
accommodations, recom-
mend sites, repairs, etc.
3. To report dereliction of
duty.
4. To excuse teachers' ab-
sences, subject to approval
of board of superintend-
ents, for absence with pay,
and in accordance with by-
laws.
5. To try and determine all
matters regarding discip-
line and corporal punish-
ment.
6. To try charges against a
teacher.
7. To transfer teachers within
district, after hearing and
subject to approval of
board of superintendents.
1089 Board of examiners created to
license teachers, consisting
of city superintendent and
four persons appointed by
Board of Education upon
nomination by city super-
intendent.
1090 Principals, branch principals,
heads of departments, teach-
ers, assistants and all mem-
bers of teaching staff shall be
appointed by Board of Edu-
cation on nomination of board
of superintendents, from es-
tablished eligible lists.
1091 Board of Education shall have
power to fix salaries of mem-
bers of supervising and teach-
ing staff subject to certain
minimums prescribed by the
statute.
1093 Board of Education empowered
to suspend principals, teach-
ers, etc., with or without pay,
pending trial of charges pre-
ferred against them.
1096 Mayor can remove any member
of Board of Education or
local school board for causes
specified.
1098 Board of Education may remove
any school officer interested
in furnishing supplies, etc.
Section State JLaw Provisions
873-4 Charter sec. 1088 repealed.
Powers and duties of local
school boards :
1. To visit schools at least
once in each quarter.
2. To make recommendations
to Board of Education.
3. Subject to by-laws of
Board of Education, to
transfer teachers, excuse
absences of teachers, and
hear charges against prin-
cipals or teachers.
871 Charter sec. 1089 repealed. Board
of examiners to consist of
seven members to hold exami-
nations and promulgate eli-
gible lists, and perform the du-
ties required by Board of Edu-
cation.
Charter sec. 1090 repealed.
See sec. 872 summarized above.
882 Board of Education shall adopt
by-laws fixing salaries of mem-
bers of teaching and supervis-
ing staff, but they shall not be
less than the rates prescribed
by the State.
Charter sec. 1093 repealed.
Charter sec. 1096 not repealed.
Charter sec. 1098 not- repealed.
INVESTIGATION OF AFFAIRS OF JSTsw YORK CITY
Section Charter Provisions
1099 Contributions by members of
teaching or supervising force
to funds to affect legislation
increasing their emoluments,
prohibited.
1100 Board of Education may inves-
tigate any subject over which
it has legal control or of
which it has cognizance, in-
cluding conduct of employees.
1101 Continuance in office of all em
ployees under public school
system.
1102 State school moneys payable to
city and credited to general
fund for reduction of taxa-
tion.
Section State Law Provisions
Charter sec. 1099 not repealed.
Charter sec. 1100 not repealed.
Charter sec. 1101 not repealed.
Charter sec. 1102 not specifically
repealed.
880 State school moneys to be cred-
ited to the Board of Education
as well as all funds raised by
the city for any purpose au-
thorized by the educational
chapter.
877-10 Board of Education shall not
incur a liability chargeable
against its funds or the city
in excess of the amount avail-
able therefor, or otherwise au-
thorized by law.
879-4 Board of Estimate authorized
to raise in its discretion money
for new schools, sites, etc.
880-3 Board of Education to make
such classification of accounts
as the comptroller of the city
shall require.
From the above comparative summary the following outstanding
features of the new law are apparent, viz. :
1. Reduction in size in Board of Education from forty-six to
seven members.
2. Possibility of conflict between the Board of Education and
the Superintendent of Schools relative to their respec-
tive powers.
3. Possibility of conflict between the Board of Education and
the municipal authorities relative to their respective
powers.
4. Failure to concentrate in clear and unmistakable language
full responsibility for the proper administration of the
public school system either on the municipal authorities,
the Board of Education or the State cf New York.
BEPOET OF JOINT LEGISLATIVE COMMITTEE 57
5. Limitation of the powers of the Board of Education.
6. Great increase in the powers of the Superintendent of
Schools.
7. Perpetuation of the Board of Superintendents.
8. Perpetuation of the Bureau of Compulsory Education,
School Census and Child Welfare.
9. Conflict between section 1102 of the charter, which was not
specifically repealed, and the State Education Law rela-
tive to the disposition to be made of the city's share of
the State school moneys ; the former providing that such
money be credited to the city's general fund for the
reduction of taxation, and the latter that It be credited
to the Board cf Education.
10. Increase from three mills to four and nine-tenths mills in
the amount which the City is required annually to
appropriate for the use of the Board of Education.
11. The inclusion within the State's educational system of city
beards of education, including the Board of Education
of the City of Xew York and the subordination of the
municipal authorities to the State in matters of school
administration.
The new law effecting these changes in the status of the local
educational system has been in force for almost four years and
its adequacy and effectiveness should be easily determinable from
the history of the public schools during that period. A consider-
able amount of data bearing on this subject has been collected and
the President of the Board of Education, the Superintendent of
Schools and the Superintendent of School Buildings have been
examined at public hearings. The following discussion of the
degree of success with which the State Education Law has been
administered is based upon a combination of sworn testimony and
independent examination of the school records.
1. Reduction in size of the Board of Education from 46 to 7
members.
One of the most popular features of the new law at the time
it was before the Legislature for enactment was that it reduced
the size of the Board of Education in 'New York City from the
unwieldy number of 46 to the small compact number of 7. But
the experiences of the past four years have shown that good school
58 INVESTIGATION OF AFFAIRS OF NEW YOEK CITY
management depends on more than the size of the board. A
board of 7 must be composed of exceptionally conscientious and
capable persons if it is to discharge satisfactorily its many
responsibilities, and it must be composed of recognized authori-
ties in the field of education and business if it is to command
public respect. The appointments made to the new beard of 7
do not seem to have been made with due regard to these considera-
tions. It is doubtful if the names of the present members are
known to more than a small proportion of the city's population,
and if the names are known, it is exceedingly doubtful if the
qualifications of these members are known. The President of
the Board of Education admitted on the witness stand that prior
to his appointment to the Board he had not been specially inter-
ested in educational matters or administration (Vol. Ill, p. 1205).
In response to further inquiries he stated that he was in the real
estate business, although at the present time he was not actually
engaged in any business. As to his personal educational qualifica-
tions, he stated (Vol. Ill, p. 1205) that he was a common school
and high school graduate, but had not attended college.
In January, 1922, the President of the Board of Education
resigned his office and accepted a political appointment to a
$7,000 job as Commissioner of Taxes and Assessments. The
person appointed by the Mayor to fill the vacancy occasioned by
the President's resignation has, according to the City's civil list,
been a paid employee of the City of New York, from 1914 to
the end of 1921, his last position being that of Commissioner
of Public Works, at a salary of $5,500, under a Borough President
whose term of office expired December 31, 1921.
One of the most important committees of the Board of Educa-
tion is the committee on buildings and sites. The chairman of
that committee is the personal physician of the Mayor's family.
Without wishing to reflect in any way upon the probity of the
individuals in question, or upon other members of the present
Board of Education, the committee believes that the persons
appointed during the last four years do not all possess the highest
qualifications for membership on this important body.
The newest appointee is almost totally unknown outside of
Ms own borough. Even in his own borough he is not conspicuous
for his knowledge of and interest in educational problems.
The law establishes qualifications for the office of Superin-
tendent of Schools and other members of &e professional staff,
EEPOET OF JOINT LEGISLATIVE COMMITTEE 59
but members of the Board of Education who are to determine the
educational policies to be carried out by these professional school-
men may be selected with regard only to the borough of their
residence. With no other check upon the appointing power, it
is not surprising that political considerations should carry great
weight. Politics should be kept out of the public schools and
some statutory safeguard should be erected to insure the selec-
tion of persons qualified for other than political reasons for
membership in the Board of Education. This can be done by
requiring appointments to the Board of Education to be made
by some non-political agency; that the desirability for some such
provision is more than theoretical is adequately established by the
evidence below.
The best test of the qualifications and competency of the present
Board of Education is afforded by its record of the past four years,
a brief account of which will now be submitted.
a. Inadequate School Accommodations.
In December, 1917, the month before the present Board of
Education took office, there were 746,114 children registered in
the day elementary schools, of whom 34,153 were on part time and
76,214 on the so-called duplicate form of organization. In
October, 1921, the last month for which figures are now available
(December, 1921) there were 817,210 children on register in the
day elementary schools, of whom 81,242 were on part time and
194,234 on double session.
In the day high schools there were 58,063 registered in Decem-
ber, 1917, none of whom were on double session and only 1.796
were on part time In October, 1921, the register had increased to
82,265 and there were 1,516 children on double session and
33,892 on part time.
These figures demonstrate conclusively that the Board of Edu-
cation has not provided sufficient additional school accommoda-
tions to care for the growth of school population. It is a serious
reflection upon New York City that 115,134 children should be
deprived of a full day's schooling and that 195,750 children
should be subjected to the disadvantage of the double session
expedient to which the city has resorted. Such a condition is
intolerable and the fault lies with the Board of Education, the
city authorities, or the provisions of law under which they operate.
If the trouble is with the law, it is the duty of the Board of Edu-
60 INVESTIGATION OF AFFAIKS OF NEW YORK CITY
cation to seek such amendments as will obviate the difficulty.
Unless the Board has actively concerned itself with desirable
modifications of the statute, however, it cannot be free from
blame for the failure to provide the necessary accommodations.
The conspicuous failure to provide sufficient accommodations for
elementary school pupils is demonstrated by the foregoing figures.
Confirmation is afforded by the compilation of statistics showing
the capacity of new elementary school buildings and additions
opened during the past four years. The records show the follow-
ing:
No. of New Buildings or No. of Sittings
Year Additions Opened Therein
1918.. ....... 2 1,294
1919 ......... 4 1,380
1920 ......... None None
1921 to Dec. 6. 16* 19,203
Total.. 22 21,877
During the preceding four years, 44 new elementary buildings
or additions were opened, with 52,847 sittings, so that the record
of the present Board of Education is unsatisfactory, both as com-
pared with requirements and as compared with the accomplish-
ments of its predecessor.
Various reasons have been given by city and school officials to
explain the delay in school construction, the war being the one
most frequently mentioned. The record, however, does not indi-
cate that the war played more than an incidental part in this
matter. At the time the small Board of Education took office, it
found a building program prepared by its predecessor, calling
for the erection of certain specified buildings, and plans were
practically completed for several typical schools. In addition
there were authorizations aggregating about $10,000,000 from
which the cost of construction could be defrayed. The new
Board, however, did not make use of thk program or of the
funds. On May 10, 1918, the President of the Board reported that
" this Board undertook to set aside all previous plans and begin
de novo," and on December 30, 1918, the Board of Estimate
rescinded the authorizations made by the previous administration
for new school construction. The first bids called for by the new
Board were for P. S. !STo. 29, Brooklyn. The^ were opened July
10, 1918. The contract was let but was latv^ 1 rescinded at the
* Of the 16 opened in 1921, all but two were opened after September 1st.
BEPOET OF JOIXT LEGISLATIVE COMMITTEE 61
request of the War Industries Board. It would appear, there-
fore, that the only delay in school construction actually attribut-
able to the war and the rules of the War Industries Board was the
four month period from July when the first contract was awarded,
and November, when the armistice was signed. On November
13, 1918, the Superintendent of School Buildings reported that
plans and specifications for fourteen new buildings and additions
were ready for the estimating table, but the first construction
contract was not let until March 24, 1919. During 1919 fourteen
construction contracts were let and all fourteen covered buildings
on the program of the previous administration for which the
funds had been authorized by the previous administration. It
took the new Board of Education more than fourteen months to gu
ahead with the identical schools selected by its predecessor.
It is difficult to find a satisfactory explanation of the delays in
school construction. The passive role played by the Board of
Education was one factor. It received pressure and criticism
from the Mayor and from the city authorities and it encountered
obstacles in its own organization and procedure, but instead of
responding actively to the pressure or striving vigorously to over-
come the obstacles it apparently more or less acquiesced in condi-
tions as it found them. The following quotations from letters of
the Mayor and from the testimony of the President of the Board
of Education are illustrative of this point.
On August 8, 1918, the Mayor wrote to a member of the Board
of Education in part as follows:
" Six months of our administration have passed by and
very little has been done toward the construction of schools.
If Mr. Snyder cannot build more than one or two schools at
a time, would it not be a good idea to replace him with a man
who could have five or six schools in the course of construc-
tion at the same time ?
" If the Board of Education will first figure out ho^\
many schools can be constructed with the money now avail-
able and after conferring with the Presidents of the various
boroughs will then recommend where the schools are imme-
diately required, I will then submit your plan to the mem-
bers of the committee on finance and budget, so that action
I can be at once taken and at least seven or eight new schools
be started without any further delay. . . . You have a
standard type of school. You have some school sites where
62 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
schools are necessary. If YOU have not enough, let us pro-
ceed to secure a sufficient number of sites in accordance with
the money we have on hand and start the schools at once/ 7
This letter was read into the testimony and the President of
the Board was then questioned as follows (Vol. Ill, p. 1264) :
" Q. N"ow, at the time you received that letter, the
$10,000,000 authorization was in force? A. Yes, sir.
" Q. Remained in force until the 30th of the following
December ? A. Yes, sir.
11 Q. But that letter did not result in any action along the
line of new school buildings under that authorization? A.
Well, no ; not under that particular authorization, no.
" Q. Well, or any other authorization until after Decem-
ber 30th ? A. I can't recall whether it was prior to that date
that the Board submitted its program for 27 new elementary
schools.
" Q. You said in May that you had made a complete new
program and wiped out the old program ? A. Yes. But I
think perhaps that program had been sent in I am not
certain I think it had been sent in before the receipt of
this letter."
On October 17. 1918, the Mayor wrote again, in part, as follows
(Vol. Ill, p. 1266):
" The question of a sufficient number of new school build-
ings in this city to properly house the school children is giv-
ing me great concern. . . . We have some ten millions
of dollars available for building schools. I would like to
have that money employed for that purpose -and I would like
to begin making preparations for the construction of these
schools at once. Mr. Bernard Baruch, representing the Gov-
ernment of the United States, has declared that we cannot
at this time have the material necessary for the construction
of a certain type of school building . . . . if w T e cannot
build one type of school building we can build another
equally good type of school building. If we cannot use steel
construction we can use reinforced concrete construction,"
The examination of the President of the Board then proceeded
ollowB (Vcl in, p. 1268):
REPORT OF JOINT LEGISLATIVE COMMITTEE 63
" Q. Xow, the Mayor wrote on October 18th that very
urgent letter to you, hoping you would use that $10,000,000,
and I do not understand how, in view of a letter of that kind
from the Mayor, you did not begin to operate on the ten
million dollars. A. Well, I can't very well answer that,
Senator, for this reason: First, I was not the President of
the Board at that time and I was not on the Building Com-
mittee at any time, never on the Sites and Buildings.
" Q. You seem to be a good man to write letters to. A.
But we were at that time under that ban, and I do not know
whether or not at that time the Board understood just what
this ten million dollars meant, whether it was tied up spe-
cifically on certain sites or buildings, I really couldn't say.
' * x * ~ # *
" Q. I can't make out, in view of this correspondence, how
it was that the 1918 program, the 1918-1919 program of the
Board of Education was delayed the way it was. I am
unable to find out. A. Well, it made a contract, as I under-
stand in the beginning, we advertised for several contracts;
we made one when the ban was put on. That ban was not
removed until Xovember, until after the Armistice was
signed.
" Q. The llth of November? A. Until after the Armis-
tice. Now this letter came in October, and the other letter
in July.
" Q. Yes ; from August to November, there was a hiatus
there. A. Well, we were helpless at that time.
" Q. What ? A. We -were absolutely helpless, as far as
making contracts was concerned.
o
" Q. About three months ? A. Oh ? no ; it is more than
that, from July until practically the end of the year.
" Q. That would be four months "
The foregoing quotations show the Mayor's impatience at the
failure of the Board of Education to accomplish more and demon-
strate how imperfectly the President of the Board of Education
could explain the Board's failure. Every member of a small
board should be familiar with such vital matters as insufficient
school accommodations and every member should charge himself
with the duty of facilitating a building program that is so sorely
needed, and with the responsibility of eliminating obstacles to the
completion of such programs. That there are many obstacles in
the existing practice is shown below:
INVESTIGATION OF AFFAIKS OF J^"EW YOKK CITY
Superintendent of Schools
Associate Superintendent Shallow
Board of Superintendents
Board of Education
J3oard of Estimate and Apportion-
ment
Associate Superintendent Shallow
Board of Superintendents
Board of Education
Superintendent of School Buildings
Municipal Art Commission
Bureau of Buildings
Department of Water Supply, Gas
and Electricity
Board of Education.
directs preparation of building pro-
gram by
who studies city's needs, reports on
order of urgency and, with assistance
of superintendent of school buildings,
estimates cost of program, which he
recommends to the
which considers, and then makes spe-
cific recommendations to the
which considers program through its
committee of the whole or committee
on buildings and sites, and then acts
on such committee's recommenda-
tions, sending its recommendations to
the
which has recommendations examined
by its committee on finance and
budget and its engineers and acts
upon their report, then notifying the
Board of Education of its action.
reports on layout of individual build-
ings in approved program to
which acts thereon and sends its rec-
ommendations to
which considers and takes appro-
priate action
as soon as site is acquired, and sur-
vey received, selects type best suited
to neighborhood and causes detailed
plans to be prepared, submitting pre-
liminary and final drawings to
which must approve design before
buildings can l)e erected; when this
approval is given the general con-
struction plans and specifications are
submitted by the Superintendent of
School Buildings to
of appropriate borough for examina-
tion and approval, while the plans
and specifications for heating and
ventilating (prepared by bureau of
plant operation) and for plumbing,
gasfitting and electrical work are sub-
mitted to the
for examination and approval. These
plans and specifications, together
with those for furniture and all other
equipment, are also transmitted to
tlie
which, after approving them, for-
wards them to the
REPOBT OF JOINT LEGISLATIVE COMMITTEE
65
Board of Estimate and Apportion-
ment
Board of Education
Superintendent of School Buildings
Corporation Counsel
Superintendent of School Buildings
Board of Education
Board of Education
Comptroller
Board of Education
Comptroller
Board of Education
Superintendent of School Buildings
Deputy Superintendent
Contractor
Final payment cannot be made to the
Commission issues a certificate that
approved plans.
which, through its committee on
finance and budget and its engineers,
examines the plans and specifications
for general construction, sanitary
work, heating and ventilation, and
electrical work, together with those
for furniture and all other equipment,
acts thereon and notifies the
of its action, and when this action is
favorable the Board of Education
informs the
who then submits proposed advertise-
ment and contract to the
for approval, and when this approval
is obtained the
advertises for bids in the City Rec-
ord for ten days, then opens bids and
reports thereon to
which may award the contract, if the
bid is within the authorized amount.
If not within the estimate, the Board
of Estimate and Apportionment must
approve the increase before the con-
tract can be awarded. After the
award the
notifies the
who examines and passes on the sure-
ties and returns bonds to
which then signs contract, has it re-
corded by its auditor and returns it
to the
who gives final approval as to finan-
cial ability and then advises
which notifies the
who notifies appropriate
who directs
to start work. -
contractors until the Municipal Art
the building is in accordance with
An examination of the periods of time actually consumed by
the various agencies cooperating in the construction of schools
also disclosed some most significant facts. A brief life his-
tory was composed for each of the schools on the Board
of Education's building program. In two instances it was
found that twenty years or more had elapsed from the time the
recommendation for a new building was made by a local school
board and the time when the building was opened for use. P. S.
66 INVESTIGATION OF AFFAIRS OF ^EW YORK CITY
No. 54, Brooklyn, for example, was recommended by the school
board of Brooklyn in 1901 ; the contract date for its completion is
September, 1922.
There is also delay due to the requirement that plans and
specifications be submitted to the Board of Estimate for approval.
The examination of the record of some twenty schools 011 the
current building program shows that plans and specifications
were before the Board of Estimate in one instance for 356 days,
another for 211 days, and in eight cases for more than 50 days.
This did not take into account the time between the return by the
Board of Estimate and a resubmission by the Board of Educa-
tion. In one case the same matter was four times before the
Board of Estimate. In four other cases the same matter was
before the Board of Estimate three times.
A further index of the actual accomplishments of the Board of
Education in providing additional school facilities is afforded by
the following table of authorizations and expenditures for such
purposes, annually from 1910.
STATEMENT SHOWING THE CORPORATE STOCK AUTHORIZATIONS
AND CASH EXPENDITURES FROM JANUARY 1, 1910, to JUNE
30, 1921 Cash Expenditures
Year Authorizations ( Sites and Buildings )
1910 $5.270,173 26 $2,632,110 72
1911 12,138,387 39 4,388.647 65
1912 360,490 00 4,851,716 26
1913 6,131,085 00 4,726,394 67
Total $23,900,135 65 $16,598,869 30
1914 $798.194 89 $5,386,927 68
1915 1,505,500 00 4,138,094 66
1916 6,172,084 68 2,567,537 06
1917 6,797,571 13 2,177,079 21
Total 15,273,35070 14,269,63861
1918 *$678,754 24 $2.233,113 32
1919 7,000,000 00 2,648,070 46
1920 8,000.000 00 5,562,616 73
1921 15,250,000 00 4,780,531 46
Total 29,571,24576 15,224,33197
Grand Total... . $68,744,732 11 $46,092,839 88
It will be noted that the expenditures of the three and a half
years, 1918 to July, 1921, were but $15,224,331.97 which, in view
of the depreciated value of the dollar during all this period rep-
.Net rescindment.
KEPORT OF JOINT LEGISLATIVE COMMITTEE 67
resents not more than $8,000,000 in building value on the basis of
1910 to 1917, or about one-half of the previous four-year totals.
The average annual authorization for the eleven and a half
years covered in the above table was $5,977,802.79 and the
average annual expenditure $4,008,073.03, or about $6,000,000
and $4,000,000, respectively.
b. Fire Hazards in the Schools.
It is the duty of the Bureau of Fire Prevention of the Fire
Department and the Bureaus of Buildings in the five boroughs to
inspect school buildings to determine whether the requirements of
law respecting exits and the elimination of fire hazards are being
complied with. In the event that violations are discovered, it is
the duty of these bureaus to serve notice thereof on the Board of
Education.
An examination was made of the records of the Board of
Education with respect to such violations. It was found
that at the time of this examination, August, 1921, there
were 7,353 violations of fire prevention rules recorded against
496 of the city's 695 school buildings. The Committee's engineer
estimated the cost of removing these violations at about $4,500,-
000. Some of the violations are less serious than others, but, on
the other hand, some are of the very greatest moment, as, for
example, stairways that are not enclosed with fire and smoke
proof partitions and not provided with self-closing doors ; interior
fire alarm systems that do not work; wooden and not self-closing
fireproof doors along the line of exit stairways; no hand fire
extinguishers; and storage of dangerously inflammable materials
in non-fireproof rooms or compartments.
The seriousness of this situation is emphasized by the words
of the Superintendent of School Buildings, quoted in the minutes
of the Board of Education for March 23, 1921, as follows:
" This with the continued growth of the schools and conse-
quent overcrowding and congestion, causes me great un-
easiness and distress of mind. If the fire prevention work
was and is required for schools under normal conditions,
how much more important must it be when a building con-
tains quite one-half or more in excess of the normal . . .
why paint and renovate the interior of a building when
there are essential items of fire prevention work to be per-
formed which would actually operate to safeguard life and
lessen fire risk."
68 INVESTIGATION OF AFFAIES OF .NEW YORK CITY
But in spite of the importance of this work and of the fact that
many of these violations date back several years, only $250,000
was made available for the removal of fire violations during the
past four years, and that appropriation was not made until April,
1921. The following table shows how the schools have been
neglected in this respect as compared with the years preceding
this administration and while it should be stated that the Board
of Education has made repeated requests since 1918 for fire pre-
vention funds, these requests have not been effective.
AUTHORIZATIONS AND EXPENDITURES FOR FIRE PREVENTION
WORK AS OF AUGUST 10, 1921
Date of
Authorization
Sept 16, 1904
Amount of
Authorization
$300,000 00
Expenditures
$300,000 00
Balance
o.")0,000 00
550,000 00 .
April 3 1908
1 000 000 00
1 000 000 00
June 3 1910
450,000 00
450,000 00 .
July 17 1911
450,000 00
447,666 59
$2,333 41
Nov 19 1915
250,000 00
250,000 00 .
July 7 1916
250 000 00
250 000 00
April 20 1917
250,000 00
240,660 85
9,339 15
April 22 1921
250 000 00
250,000 00
On September 14th the Committee examined the Superintend-
ent of School Buildings on this subject. Significant portions of
the testimony are given below (Vol. Ill, p. 1364ff) :
"Q. Well, this question of doing away with violations of
the fire prevention rules has been a matter of a good deal of
concern to you for several years, hasn't it ? A. It has.
. "Q. And you have made efforts to secure moneys for the
purpose of correcting the conditions ? A. Yes, sir.
"Q. You have reported it frequently to the Board of Edu-
cation ? A. I have.
"Q. And seen that it was presented to the Board of Esti-
mate and Apportionment? A. That would not be for me
to do.
"Q. That would not be your function ? A. No, sir.
"Q. I see in your letter of Mar. 18, 1921, that you say:
'The condition in relation to fire prevention with the con-
tinued growth of schools and consequent overcrowding and
congestion, causes me great uneasiness and distress of mind.'
Is that true? A. It was.
REPORT OF JOINT LEGISLATIVE COMMITTEE 69
"Q. 'If the fire prevention work was and is required for
schools under normal conditions, how much more important
must it be when buildings contain quite one-half or more in
excess of the normal ?' A. Yes, sir.
"Q. 'I sincerely hope that a resumption of the carrying
out of this most important work may be brought about with-
out the stimulus represented perhaps by some awful acci-
dent, either here or elsewhere. 7 You said that, didn't you?
A. That is in the letter, yes.
"Q. You adhere to it ? A. I do.
" Q. And I notice you say, i These orders (that is, the fire
prevention rules) have been and are now available at a mo-
ment's notice. If there be no intention of granting funds
for fire prevention work, then we should know it and make a
study of the situation, looking to a decision as to whether
or not all moneys for certain repairs should be used for this
work.' Was any such decision made to divert moneys for
repairs generally to this work? A. What was the date of
that letter, please ?
"Q. March, 1921? A. No.
"Q. You need the money for other repairs that you get?
A. We do.
"Q. And you use it for other repairs ? A. We do.
"Q. I notice you say, 'Why paint and renovate the interior
of a building, when there are essential items of fire preven-
tion work to be performed, which would naturally operate
to safeguard life and lessen fire risk.' A. That is a question
of judgment.
"Q. 'The situation becomes more serious with each day's
delay,' and then comes an appeal to the Board of Education
to apply to the Board of Estimate. I will read it : 'I would
earnestly recommend that the Board of Education adopt
resolutions for transmission to the Board of Estimate and Ap-
portionment, stating the stern necessity of prompt action
upon the Board's request for funds to enable the department
to undertake immediately fire prevention work that is ab-
solutely necessary if we are to safeguard properly the lives
of the children entrusted to our care.' That is your letter?
A. I believe it is, yes, sir.
"Q. And I notice elsewhere that you state that if the cor-
rection of the violations was compelled, it would result in
the shutting down cf a lot of schools ? A. Pardon me. I do
70 INVESTIGATION OF AFFAIRS OF NEW YOEK CITY
not think that that is quite the meaning of that paragraph
as I recall it. I have not seen it in some time.
"Q. Well, I was trying to be brief. Sometimes I am brief
at the expense of accuracy. A. I meant this, that the fire
department have the right to close up any premises which it
considers unsafe, and we might possibly be confronted
someone might reach such a decision, and we would be con-
fronted with such a decision.
k * Q. Here it says, ' In the event, however, of the Fire
Department enforcing through legal proceeding the carry-
ing out of the orders now outstanding on our buildings,
there wculd be no alternative, it would seem, except to close
such structures for the time being, either in whole or in
part, until funds had become available and the orders
executed. 7 A. That is what I had reference to.
" Q. That is an accurate statement, is it ? A. That is what
I had reference to. The Fire Department could do that.
"Q. I meant to state it in substance in that form ? A. Yes,
sir.
Senator Downing: Did the Fire Department close any
school buildings ?
The Witness : No, sir.
" Q. Here you say, ' For instance, in Public School 117,
Brooklyn, which was not originally intended for a school
building, we have been obliged, much against the wishes of
the District and Division Superintendents, to prohibit the
use of the upper floor, owing to the absence of enclosed fire-
proof stairway and other items, the cost of which was esti-
mated about two years ago to be about $34,000, and no funds
being available for the work. 7 ....
In reply to a question as to how much money would be required
to correct outstanding fire violations, Superintendent Snyder
stated (Vol. Ill, p. 1368): "Around four millions of dollars."
The following quotation from the testimony gives Superintend-
ent Snyder' s recommendation for the prevention of such an accu-
mulation of nncorrected violations. (Vol. Ill, p. 1381).
"Q. Now what is +he matter with the system? A. Why,
the system was that there has never been a policy the Board
of Education was never in a position to fix a policy and go
ahead and do the work systematically and know what it could
do this vear and next vear and the vear after that.
REPORT OF JOINT LEGISLATIVE COMMITTEE 71
'* Q. Because they didn't have the money ? A. They didn't
have the right to fix a policy.
"Q. To have the money? A. I wouldn't put it that way.
They didn't have the right to fix a policy and the ability to
carry it out when once fixed.
"Q. Where would you vest that power, where should it be
vested so as to insure it being carried out? A. I think all
these things resolve themselves simply down to this, that
the Board of Education either should be absolutely independ-
ent and handle its own affairs and be able to fix its policy, or
should know that it is not independent and must bow to the
city departments or something of the kind. It is either one
thing or the other, and everything can be traced to that one
thing.
a Q. Would you regard the system under which this large
accumulation of fire violations occurs, is wrong, needs cor-
rection ? A. I believe it does ; yes, sir.
" Q. By statute, by law ? A. Whatever is necessary to
bring it about. You know better than I do.
"Q. By law ? A. Some way that it should be done.
" Q. And there should be some power in connection with
the Board of Education which will enable it to meet these
violations of the fire prevention rules as they come up ? A.
Yes, sir ; and anything else that comes up.
a Q. Well, particularly these? A. Yes, sir."
c. Failure to Repair Fire Damage to Board of Education
Building
In February, 1918, the seventh, eighth and ninth floors of the
Hall of the Board of Education, at 500 Park Avenue, housing the
executive offices of the Board, were completely burned out. Bids
for the rebuilding of these floors were not, however, opened until
December 7, 1921, nearly four years after the fire. During this
interval the work of the Board has been seriously interfered with
because of compulsory vacancy of the three top floors of its build-
ing. The Bureau of School Buildings, for example, had to be
moved to inadequate quarters in the Municipal Building, several
miles away from the other offices of the Board. The delay in
agreeing on new plans, in securing an appropriation and in letting
the contract lays the Board of Education open to the most serious
criticism. "No business corporation would tolerate such slovenly
and inefficient methods.
72 INVESTIGATION OF AFFAIRS OF ^N"EW YORK CITY
The following extract from the testimony of the President of
the Board of Education on this subject is illuminating (Vol. Ill,
p. 1325) :
" Q. Was there a fire in the Board of Education Build-
ing ? A. * * * Yes, in our building.
" Q. In your building ? A. In February, I think, 1918.
"Q. What did that do? A. Well, it destroyed, I think,
the three upper floors of the building.
" Q. How many floors have you got ? A. It is a 9 -story
building.
" Q. Did you need that room ? A. Yes, we needed it badly.
" Q. You have needed it badly during all that time ? A.
Yes.
" Q. But it has not been restored ? A. No, it has not.
" Q. Only a temporary roof put on it ? A. That is all.
" Q. Is anything being done now to correct it ? A. Yes.
The Department is working on plans. The Building Bureau
is working on plans.
" Q. That is, the Building Bureau of the Board of Educa-
tion ? A. Of the Board of Education.
" Q. Haven't they worked on plans before ? A. Plans
have been prepared, yes.
" Q. They must have had the plans in the same year it
burned, didn't they ? A. No, we had no appropriation that
year.
" Q. You have to get plans before you get an appropria-
tion, don't you? A. Yes, but I think we prepared plans
but failed to secure an appropriation.
'"* Q. That is, you prepared the plans in 19.18 ? A. I am
not sure. I think in 1918, yes.
" Q. Right after the fire? A. And thereafter, I think the
plans were changed. They were to change the stairways and
make some other changes in the building.
" Q. When were tbey changed ? A. Well, that I can not
tell you. The details as to that the Building Superintendent
has.
" Q. Who recommended the changes, the same Bureau ?
A. I think the members of the Board requested changes, and
I think perhaps the Superintendent of Schools.
" Q. Well, now, this plan for the repair of this building
was submitted to the Board of Estimate when, first? A. I
can't tell you, Senator.
REPORT OF JOINT LEGISLATIVE COMMITTEE 73
" Q. 1918? A. I couldn't say; I would have to get the
facts on that; I couldn't remember the dates.
" Q. It has been pending a long time ? A. They were
pending a long time, yes.
"Q. November 27, 1918, my records show? A. They
were subsequently changed.
" Q. And presented again June 25, 1919, the record
shows, and then again in July and then again March, 1920,
and then in May, 1920, so you have made abundant applica-
tion to the Board of Estimate ? A. I have followed that up
pretty closely myself personally. We were anxious to get in
the building to have the building repaired and we were over-
crowded, and as I say, we were very anxious to get in there.
" Q. You have needed the room all the time, it was occu-
pied before the fire, wasn't it? A. It was necessary to have
some of our departments housed outside of the building, be-
cause of lack of space there, due to the fire.
" Q. I say, it was occupied when the fire occurred ? A.
It was.
" Q. You have needed it ever since ? A. We have.
" Q. You have had to hire some rooms outside ? A. We
have.
" Q. To what extent ? A. Well, we are not hiring any
rooms outside but we are occupying city owned property.
" Q. City property ? A. Yes."
d. Incomplete By-Laws and Delayed Minutes
Matters of less public importance but of almost equal signifi-
cance as indicating the degree of efficiency with which the Board
of Education has administered the new Education Law are those
relating to the revision of the Board's by-laws and the prepara-
tion of its minutes. The new law of 1917 so changed the
organization and scheme of the school system that a complete re-
vision of the by-laws was necessary in order to make them con-
form with the new statute. This complete revision had not,
however, been made up to September 12, 1921, when the Presi-
dent of the Board of Education was examined on this point by
the Committee. A few sections had been adopted in new form,
but the great bulk of the by-laws was still in the form of a vol-
ume published in 1914 with literally hundreds of amendment
slips pasted to the appropriate pages, many of which antedate
74 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
the law of 1917 and in the form of special documents containing
salary schedules as enacted by the Legislature.
A Board which can permit a delay of nearly four years in the
preparation and adoption of by-laws to govern the administration
of the public school system of which it is the head, cannot escape
criticism on the ground of incapacity or lack of interest in the
great responsibility with which it is charged.
The Board has also tolerated during its term of office a condi-
tion which no business house would permit to exist for a moment.
The minutes of Board meetings are records of the greatest import-
ance to teachers, board members, board officers and city authori-
ties as they are the official documents setting forth the Board's
determinations and decisions. The last volume of minutes, how-
ever, to be furnished with a printed index is that for 1915. The
index for 1916 is said to be completed, but it has not yet gone to
the printer. A delay of five years in indexing current minutes is
inexcusable. Another instance of the dilatoriness permitted by
the Board is the fact that it takes the secretary's office about two
months to issue printed minutes of Board meetings. The Com-
mittee has been on the mailing list for these minutes and on the
day that this statement is written (December 7, 1921) the last
meeting for which minutes have been received is that of Septem-
ber 28, 1921, and those minutes came only a few days ago. There
has been a constant lag of about two months between board
meeting and receipt of minutes ever since the Committee started
inquiry in this direction.
It is generally agreed that a small Board of Education can be
more efficient than a large board, and that the abolition of the
former board of 46 members was most desirable. It seems quite
certain, however, that a Board of Education of seven members is
too small for the City of New York. Boards of Education in
other cities of the state number from three to nine members;
about twenty cities having boards of nine ; about twenty-five cities
having boards of from five to seven, and the others having boards
of from three to five. It is not logical that New York, the largest
city of the state, should have a Board of Education smaller than
the Board of Education in twenty other cities with far less inhab-
itants. The New York Board of Education should be large enough
to handle its problems effectively and yet not so large as to be
unwieldy, and its term of office should be uniform with the terms
af office of Boards of Education in the other cities of the state.
REPORT OF JOINT LEGISLATIVE COMMITTEE 75
It seems equally certain that the statutes should impose
some means for guaranteeing the quality of the local appoint-
ments to the Board of Education. Appointment should be made
on the basis of qualification for the duties to be performed. An
appointing officer with unrestricted power to appoint is subject
to a degree of external political pressure to which it is difficult
not to respond, and political considerations should play no part
in the selection of members of a Board of Education.
From the foregoing account of the division of responsibility
between city and educational authorities under the present stat-
ute, it is also clear that the only remedy lies in so amending the
law as to centralize power in a single agency. If the Board of
Education is to be responsible for the proper conduct of the
schools, it should have the power to carry out its program without
hindrance.
2. Possibilities of conflict between the Board of Education and
the Superintendent of Schools, relative to their respective powers.
Cinder the Greater New York Charter, the Board of Education
had specific power to enact by-laws " defining the duties of the
city superintendent of schools." The Education Law of 1917 re-
pealed this section of the charter (Section 1068) and did not
enact an equivalent.
In addition to this negative act, it specifically constituted the
Superintendent of Schools, " the chief executive officer of such
board" (of education), and gave him power subject to the by-
laws, " to enforce all provisions of law and all rules and regu-
lations relating to the management of the schools." He was also
given specific jurisdiction over the employees of the Board of
Education.
The material for a serious controversy between the Board and
its Superintendent was thus at hand and controversy developed.
The new Board of Education adopted new by-laws, defining the
powers of its President, of the Board and of its subordinates.
The Superintendent of Schools felt that his prerogatives under
the statute had been invaded by these by-laws and appealed to the
State Commissioner of Education for relief. The Commissioner
upheld him and directed the Board to amend its by-laws so as to
eliminate the objectionable provisions. The significance of the
decision by the Commissioner is indicated bv the alterations that
76
INVESTIGATION OF AFFAIRS OF .NEW YORK CITY
were made by the Board pursuant to his injunction, some of which
are quoted below.
First Version
See. 3. "Any salaried officer, clerk
or other employee may be suspended
by the President or Superintendent of
Schools. . . ."
Sec. 4, Par. 2. " The President shall
exercise general supervision over the
transaction of the business affairs of
the Board of Education and shall
have the power to require that re-
ports be made to him by any officer
or employee for his use and informa-
tion, or for presentation to the Board
for its consideration and action. The
Superintendent of Schools shall act
in the administration of business af-
fairs under the advice and guidance
of the President."
First Version
Sec. 6, Par. 5. The Superintendent
of Schools " shall recommend to the
Board of Education the organization
of day and evening schools and other
educational and recreational activi-
ties into major divisions, each of
which shall be supervised by an asso-
ciate superintendent, to be assigned
by the Superintendent of Schools,
subiect to the approval of the Board
of Education."
Sec. 6, Par. 8. Relative to the Su-
perintendent of Schools, " In his ab-
sence or inability to servo, the Board
of Education shall designate an as-
sociate superintendent to serve as
acting Superintendent of Schools."
Sec. 7, Par. 10. Relative to the
Board of Superintendents, " It shall
make rules and regulation? with the
approval of the Board of Education
for the admission of pupils to the
schools, for their promotion, gradua-
tion and for their transfer from one
school to another."
Amended Version
"Any salaried officer, clerk or other
employee may be suspended by the
Superintendent of Schools. . . .''
" The President shall perform the
functions that appertain to the office
of a presiding officer. The Board
may require that reports be made for
its consideration arid action by any
officer or employee."
Amended Version
The Superintendent of Schools
" shall recommend to the Board of
Education the organization of day
and evening schools and other edu-
cational and recreational activities
into major division?. Each of said
divisions shall be supervised by an
associate superintendent, to be as-
signed by the Superintendent of
Schools." "
" In his absence or inability to
serve, he shall designate an associate
superintendent as acting superintend-
ent of schools."
" Tt shall make rule* and regula-
tions for the admission of pupils to
the =chools, for their promotion and
graduation and for their transfer
from one pchool to another."
The testimony of the Superintendent of Schools before the
Committee on September 14, 1921, on this subject was as follow?
(Vol. Ill, p. 1407) :
" Q. I understood you to say that reasonable coordination
could be expected from the educational system as it is now
BEPORT OF JOINT LEGISLATIVE COMMITTEE 77
organized; that is, between the Board of Education and the
Superintendent and the Board of Associate Superintendents.
That works well, does it ? A. Within the Board, yes. That
is, between the Board of Education, the Board of Superin-
tendents, and the Superintendent of Schools.
" Q. They cooperate with a reasonable degree of success
and efficiency ? A. Yes, sir, they do now.
" Senator Downing : In harmony ?
" The Witness : Yes. It took a good while to get har-
mony, naturally. I might explain here that this new law
created an entirely new condition, and the tradition was in
the Board of Education that affairs should be carried on as
they had been carried on before this law, and in the carrying
out of the business of the Board, there may have been a
little conflict with the powers of the Superintendent of
Schools, as he conceived them, and the Superintendent of
Schools, of course, in his high regard for the sacredness of
his office, had to protest against any such action and appeal
to the State Commissioner. That was perfectly natural.
There was not any acrimony on either side. It was simply
a definition of powers. It took two years to straighten that
out.
" Q. You have it straightened out now ? A. Yes, sir, it
is straightened out now.
" Q. And the present workings are smooth ? A. At pres-
ent, yes, sir."
A situation where a Board of Education, nominally the head
of a school system, is by statute given inferior powers to those of
one of its subordinates, is unwholesome and subversive of dis-
cipline. It is hard to see how a self-respecting Board of Educa-
tion could acquiesce in such a condition. Responsibility and
authority should be placed in the same hands. If a Board of
Education is not deemed competent to administer the affairs of
the school system, the remedy lies not in elevating an appointee
of that Board to a position superior to that of the Board itself,
but in changing the character of the Board.
A continuance of this unwholesome condition would be most
unfortunate. The Board of Education should be the unquestioned
fiscal and policy determining head of the school system and it
should have full power to delegate to its subordinates the responsi-
78 INVESTIGATION OF AFFAIES OF .NEW YOKK CITY
bility of carrying out the policies upon which it determines.
It is of course true that a Board of Education has not the technical
pedagogical training possessed by the professional staff and
that lay interference in the actual teaching of the children
might be most dangerous, and that certain safeguards must
be established by law which will insure a reasonable degree of
freedom to the professional head of the school system. On the
other hand there is ample evidence that the law under which
the Board of Education now operates does not satisfactorily
meet this problem. In a city like New York, which has the
greatest educational problem in the world, it does not necessarily
follow that the professional schoolman best qualified to carry out
the educational program of the schools will also possess the quali-
fications to supervise the strictly business duties of the school
system, such as the purchase of supplies, the construction and
alteration of buildings, the assignment of janitors and other em-
ployees, etc., even if he had the time. In a smaller city, where
these business matters do not constitute the burden that they do
in New York, the Superintendent may be able to exercise the two
functions without detriment to either. This is not likely, how-
ever, ever to be true in New York City, and yet under the present
Education Law the Superintendent of Schools is made the execu-
tive officer of the Board of Education, with jurisdiction not only
over the educational side of the Board's work, but also over the
Board's business activities. Authority should, therefore, be given
to the Board of Education to delegate the non-professional and
administrative duties to some officer other than the Superintend-
ent of Schools, if it deems it wise to do so.
3. Possibility of Conflict Between the Board of Education and the
Municipal A uthorities Relative to their Respective Powers
The repeal of most of the educational chapter of the charter
and the enactment of an entirely new statute changing the rela-
tionship between the Board of Education and the city authorities
afforded an opportunity for either friction or co-operation in the
working out of the new relationship. From the records it appears
that it was friction and not co-operation which resulted, and this
in spite of the fact that the Board of Education was composed
wholly of persons appointed by the present Mayor.
The chief points at issue are set forth fully in a brief submit-
ted on April 4, 1919, by the Superintendent of Schools to a Com-
I
REPORT OF JOINT LEGISLATIVE COMMITTEE 79
mittee of the Board of Regents, requesting relief from "the unlaw-
ful control of the public school system ... by the municipal
authorities." This brief noted the following points.
1. That the municipal authorities diverted the State school
moneys for 1918 amounting to some $2,300,000 from the
Board of Education to the general fund for the reduction
of taxation, following the provisions of Sec. 1102 of the
charter instead of Sec. 880 of the Education Law.
2. That the municipal authorities sought to control educational
policies and administrative details by a minute segregation
of appropriations and the imposition of terms and condi-
tions.
3. That the municipal authorities assumed a jurisdiction over
administrative employees of the Board and by withholding
their pay worked great hardship.
4. That the municipal authorities sought to gain entrance into
the school system and establish jurisdiction over school affairs
through the intrusion of the Commissioner of Accounts into
the business of the Board.
That the attitude of the Mayor, as indicated by his oral and
written utterances, was significant of the relationship be-
tween the City and the school authorities.
The Mayor's attitude toward school affairs was further devel-
oped in the testimony of the Committee, copies of letters written
by him having been read into the record.
Extracts from these letters and from others in the Committee's
possession follow:
(Vol. Ill, p. 1272) From the Mayor to Mr. Prall, Nov. 25,
1918.
The by-laws a now pending and supported by Superintend-
ent Ettinger would place that department in a position that
would require all reports upon investigations ordered by
the Board of Education to come to the Board through the
Superintendent. This is part of a policy which, if persisted
in, makes the Superintendent a dictator and practically the
superior of the Board of Education.
"Superintendent Ettinger is submissive to and is practi-
cally controlled by Cook, the Auditor, who is the trouble-
maker in the Board of Education and has little regard for
the expenditure of money appropriated for educational pur-
poses.
80 INVESTIGATION OF AFFAIES OF J^EW YORK CITY
"I regret to be obliged to write you about this, but unless
the Board of Education puts an end to the dictation of Cook,
through Ettinger, there is little hope that we will be able to
accomplish anything for the improvement of school condi-
tions in this city. A year has almost passed and practically
nothing in a constructive way has been accomplished by the
new Board of Education.
"Won't you please exercise the rights given you under the
law to see that the Board of Education and not the subordi-
nates run the schools of this City ? "
When questioned about the "Cook" referred to in this letter,
President Prall testified, "He is an auditor, a very good auditor;
understands his business thoroughly. We depend on him abso-
lutely."
"Q. He has the confidence of the Board ? A. We depend
on him absolutely.
"Q. He has the confidence of the Board ? A. He has.
"Q. And Ettinger the same ? A. Yes, sir.
(Vol. Ill, p. 1277) From the Mayor to Mr. Prall, June 27,
1919.
"My Dear Commissioner: I wish you would confer with
the members of the Board of Education and see to it that
no increases in salary are made in the Educational Depart-
ment, until such time as we find how financial matters stand
in the Department.
"Cook, Ettinger and Company have so bungled matters
that it will be hard to straighten things out."
(Vol. Ill, p. 1277) From the Mayor to Mr. Prall, June 14,
1919.
"Dear Sir: I note that Superintendent Ettinger, who is
anxious to have the Legislature increase his salary by $5,000,
which the Board of Estimate and Apportionment opposed,
is attempting to give the public the impression that the Board
of Estimate and Apportionment is opposed to keeping open
the swimming pools in the public schools. This is absolutely
false, and Ettinger knows it.
"There has been $45,000,000 appropriated by the present
Board of Estimate and Apportionment for the public schools
of the city, and out of that there will be sufficient to pay the
few attendants necessary, the cost of which is less than
$7,000, to look after the swimming pools for the summer.
BEPORT OF JOINT LEGISLATIVE COMMITTEE 81
" Ettinger had no trouble in finding money out of the
$45,000,000 to start new activities so that his friends could
get high salaried jobs and increases in salary for other Ettin-
ger favorites.
"A man who resorts to such methods to mislead the public
is not the proper person to be Superintendent of the Schools
of the City of New York."
On August 6, 1919, the Mayor referred to the Police Commis-
sioner for investigation an anonymous letter charging that the
Superintendent of Schools had improperly pensioned a teacher.
The Police Department made an investigation and reported on
Sept. 3, 1919, naturally finding nothing to support the accusa-
tion as all pensions are under the jurisdiction of the Teachers'
Retirement Board and not under the Superintendent of Schools.
On September 2, 1920, the Mayor wrote President Prall as
follows:
"Dear Sir: I am in receipt of your letter of September
1st with reference to the refusal of the Department of
Finance to honor the payrolls of the Board of Education
so that the teaching force will receive the increases granted
them under the mandatory legislation passed by the Legis-
lature at its last session.
"The Board of Education should immediately begin man-
damus proceedings against the Comptroller to compel him
to pay the salaries now legally due the teachers.
" I have directed Corporation Counsel O'Brien to confer
with you without delay to the end that the teachers' salaries
be paid without any further quibbling."
On September 23, 1919, the Mayor wrote President Prall in
part as follows:
1 ' Ettinger bitterly opposed the investigation of the expen-
ditare of $44,000,000 appropriated for educational purposes.
He now seems to have the City Club behind him to help him
thwart your investigation of the finances of the educational
department and ether conditions in our school system. The
Board of Education should take some action so that Ettinger
will give his time to educating the children and bettering
conditions in our public schools instead of playing education
politics and making trouble for those who want school-houses
erected and the children given a proper education."
82 INVESTIGATION OF AFFAIRS OF JN"EW YORK CITY
On December 4, 1919, the Mayor wrote tho Corporation
Counsel as follows:
" Dear Mr. Burr : I congratulate you upon your success
in the Court of Appeals in the case of Hirshfield, Commis-
sioner of Accounts of the City of New York against Cook,
Auditor of the Educational Department. I understand the
decision was unanimous in favor of the city investigating
the financial condition of the educational system.
" The Board of Education have at all times, as you know,
been in favor of a thorough investigation of the financial
condition of the educational system under Superintendent
Ettinger, but this policy was opposed by Superintendent Et-
tinger and Auditor Cook, and other prominent persons in the
city who for some reason, feel that the taxpayers should not
know what is being done with their money. However, the
Court of Appeals has sustained the city's contention and the
investigation can now go on.
" If Ettinger and Cook had not been encouraged by Fine-
gan of the State Educational Department they would not
have attempted to override the action of the Board of Educa-
tion, their superiors, and the people of this city would have
known long ago whether the finances of the Board of Educa
tion were being properly expended.
" The decision of the Court of Appeals should be suffi-
cient to convince Superintendent Ettinger that his superiors,
the Board of Education, must be recognized, and that he can-
not override them with the aid of Deputy Einegan at
Albany.
" Superintendent Ettinger can now devote his time to the
proper housing and education of the children and the better-
ing of the moral tone of the schools of the city.
'' The people of the city appropriate millions of dollars
yearly for the better education of their children. They
want a sufficient number of school-houses to properly house
the little ones and a thorough fundamental education given
to them. They do not want their money wasted for unneces-
sary textbooks, fads, frills and fancies.
" It is a pleasure to remember that the great judges of the
Court of Appeals have stood by the people and against the
traction interests in their fight for an increased fare, and
again by the people and against those in the school system
KEPOKT OF JOINT LEGISLATIVE COMMITTEE 83
who objected to the people knowing what is done with the
millions they appropriate yearly for education, as well as
the many other important cases which are of great interest
and importance to the people."
On December 9, 1919, President Prall wrote the Mayor as fol-
lows (Vol. Ill, p.' 1282) :
" My Dear Mr. Mayor : Some time between Friday even-
ing, December 5th, and yesterday (Monday) morning, De-
cember 8th, certain correspondence in my files, i. e., all the
letters received by the President of the Board of Education
from the Corporation Counsel, and all the duplicate
copies of letters sent to the Corporation Counsel during the
period from January, 1919, to date, were surreptitiously
removed.
" I, therefore, respectfully request that you assign to this
case capable men from the detective bureau of the Police De-
partment in order that I may apprehend the person or per-
sons guilty of this outrage."
Mr. Prall testified that he regarded this as an important loss
but that the guilty parties were never apprehended. In reply to
the question whether there were any matters pending at the time
of the theft on which the correspondence had a bearing Mr. Prall
stated (Vol. Ill, p. 1285) :
" I think the controversy between the Superintendent of
Schools and the Commissioner of Accounts was on at that
time."
On December 20, 1919, the Mayor wrote President Prall a
letter in which the following statement is made:
" There is no discipline in the educational system under
Superintendent Ettinger. Certain principals and certain
high officials spend little time performing the duties for
which they are paid. Some action should be taken by tha
Board of Education to punish insubordination."
The person not already familiar with conditions in New York
City during the past four years must read this correspondence
with amazement. But even the foregoing extracts do not tell the
whole story of the antagonism between municipal and educational
authorities.
The Court of Appeals decided a case on November 22, 1921,
that may prove of great significance in the future determination
84 INVESTIGATION OF AFFAIRS OF ,NEW YORK CITY
of the relationship between municipal and educational authori-
ties, but unless the City and the Board of Education can agree
as to the bearing of this decision upon the current business of the
public school system there may be frequent recourse to litigation
of a similar nature. A certain cure would be the revision of the
Education Law as affecting New York City. The decision
referred to is printed in the New York Law Journal for Decem-
ber 20, 1921, and reads in part as follows:
" Section 880 of the Education Law provides that all
funds collecHed or received from any source for school
purposes shall be paid into the treasury of the city and shall
be credited to the board of education ; that such funds shall
be disbursed only by authority of the board of education
and upon written orders drawn on the city treasurer or
other liscal officer of the city, such orders to be signed by the
superintendent of schools and the secretary of the board of
education or such other officer as the board may authorize.
The city treasurer is inhibited from permitting the use of
said funds for any purpose other than that for which they
are lawfully authorized, or paying out said funds except on
audit of the board of education 'and the countersignature of
the comptroller. A casual reading of the Education Law
leads to the conclusion, so tersely stated in the Gunnison case,
that the only relation of the city to the subject of education
is as custodian of the school funds and to disburse the same
according to the instructions of the board of education.
" The language quoted from subdivision 7, ' the board of
education shall administer all moneys appropriated or avail-
able for educational purposes in the city, subject to the pro-
visions of law relating to the audit and payment of salaries
and other claims by the department of finance,' must be
read in connection with section 880 of the Education Law,
which provides that school funds shall be disbursed only by
the board of education, and clothes that body with power of
audit.
" The power vested in the board of education to administer
the school fund is a grant of authority to that body to fix
salaries of all employees of the board. Such salaries when
fixed by the board are presumably embodied in the estimate-
filed with the board of estimate and apportionment. Upon
receipt of a requisition from the board of education the
KEPORT OF JOINT LEGISLATIVE COMMITTEE 85-
comptroller is authorized to ascertain whether or not the
requisition made upon him embraces charges against the
education fund as disclosed in the record in his department
relating to the board of education. If such requisition be
found correct there remains but one duty on the part of the
comptroller, viz, to draw the necessary warrant for the pay-
ment of the salaries, etc. He is powerless to exercise a power
of audit conferred on the board of education. We cannot
ascribe to the Legislature an intention to provide for two
several boards of audit. The language used in subdivision 7
was applicable only to the procedure to be adopted by the
board of education that in the disbursement of its funds it
shall adopt the procedure prevailing in the case of claims
against the city, require as it did in the case at bar pre-
sentation of the claim, proofs in support of the validity of
the same, the extent and value of the labor and material and
generally all information obtainable relating thereto before
any allowance or audit of the same shall be made. Had
relator in the first instance filed its claim with the comp-
troller, as is asserted it should have done, and the comptroller
audited the same for a stated amount and drawn a warrant
for the same on the city treasurer, the latter officer could
not pay the same save by a violation of the provision of the
Education Law, which prohibits the treasurer from making
payment from the school fund except on audit of the board
of education."
It is regrettable, to say the least, that the possibility for such
controversies should exist and that if existing, the issues should
IIMVO br-en rrr'sefl. It is equally regrettable that it should have been
necessary for the parties to such disputes to have recourse to the
courts, to the Regents and to the State Commissioner of Educa-
tion, because whichever side was favored in the decisions, the
litigation, confusion and consequent irritation must necessarily
react on the children whose education is suffering from the dis-
agreement between school and city authorities. So far as the
wording of the statutes affords an excuse for such conditions the
statutes should be amended and the excuse removed.
This decision of the Court of Appeals lends judicial sanction to
the suggestion that the dual control over school moneys hereto-
fore exercised or claimed be ended, by specifically excluding the
municipal authorities from any control over school funds.
86 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
4> Failure to Concentrate in Clear and Unmistakable Language
Full Responsibility for the Proper Administration of the
Public School System Either on the Municipal Authorities,
the Board of Education or the State of New York
The evidence to support this interpretation is adequately set
forth under the two sub-divisions immediately preceding. It is
only necessary to add here that if the S+ate is to assume full
responsibility for the proper administration of the New York
City school system it should enunciate that fact in clear terms
and should specifically repeal those sections of the charter and
other local laws in conflict with that theory.
5. Limitation of the Powers of the Board of Education
This point has been touched upon under sub-division 2 above.
The powers of the present Board of Education are demonstrably
far inferior to those of its predecessor. It cannot be successfully
argued that the powers of a Board of Education should be limited
in favor of one of its subordinates, or that if local control is desir-
able the Board should be unable to modify or dispense with two
powerful agencies nominally subordinate to it, viz., the Board
of Superintendents and the Bureau of Compulsory Education.
The State Education Law in so far as it applies to the City of New
York clearly curtails the power of the Board of Education. It
does not seem that the experience of the past four years indicates
that this was a wise provision. So long as responsibility and
authority are not entrusted to the same hands there is encourage-
ment for an evasion of obligation and a shifting of blame for
non-performance. And in all cases of this character the ultimate
sufferers are the children for whose benefit Boards of Education,
Boards of Superintendents and school officers are supposedly
created.
6. Great Increase in the Powers of the Superintendent of Schools
This matter has also been discussed at length under sub-division
2 above and it will not be further dealt with here.
7. Perpetuation of the Board of Superintendents
The Board of Superintendents is a unique institution. It is an
inheritance from the time of consolidation (1898) when it was
apparently deemed desirable to carry over into the structure of
the Greater City local officers of the Boards of Education of New
York and Brooklyn. It survived all the amendments to the
REPORT OF JOINT LEGISLATIVE COMMITTEE 87
Greater New York charter and was continued in the education
law of 1917 as a mandatory institution. But this law while pro-
viding a general statute for all cities of the State, established a
Board of Superintendents only in the City of New York by the
common expedient of creating such a board in "a city having a
population of one million or more." It is hard to see why the
requirements of a city with a population of over a million should
differ so materially from those of a city of under a million. If a
proper school administration requires a Board of Superintendents
in the one case, why does it not require a Board of Superintend-
ents in the other case ? And if a Superintendent and a group
of Assistant Superintendents can operate successfully in a city of
less than a million, why should it be necessary for a larger city to
place its educational administration in the hands of a board of
nine persons and to be able to make progress only when a majority
of such board can be secured. The opportunity for discussion by
a board cannot always be said to accelerate school business. The
President of the Board of Education sought to explain the delay
of his Board in adopting by-laws by saying that the Board of
Superintendents had been considering a draft of by-laws "I guess
for a year, perhaps for two years." Examination of the minutes
of the Board of Superintendents shows the many discussions and
the many references and reports relative to matters which should
be settled by prompt executive action. The records show that one
of the major contributing factors to the delay which has charac-
terized the provision of additional school facilities is the fact
that the Board of Superintendents has to originate the program
and approve the layout of the new buildings contemplated therein.
Much time could be saved in the working out of an educa-
tional program, and that the management of the schools would
be much more efficient, if the Board of Superintendents were
abolished as a board, and if the Superintendent of Schools, with
a staff of competent Assistant Superintendents, was made the
agent of the Board of Education in the carrying out of educationa]
policies.
8. Perpetuation of the Bureau of Compulsory Education,
School Census and Child Welfare
Reference has already been made to the provision of law, mak-
ing mandatory a Bureau of Compulsory Education, School Census
and Child Welfare. The State Education Law, passed in 1917,
id not single out this bureau for special recognition. It was
88 INVESTIGATION OF AFFAIRS OF .New YOEK CITY
left on a parity with the other administrative bureaus of the Board,
subject to modification, abolition and consolidation by the Board
of Education.
Chapter 612, Laws of 1920, however, added a new section to the
State Education Law, placing the Bureau of Compulsory Educa-
tion ID the mandatory class with the Board of Superintendents
and the Board of Examiners. This amendment applied only to
the City of New York as it was worded to affect " a city having
a population of one million or more."
Mandatory legislation of this character affecting only the
City of New York, particularly when in the form of amend-
ments to general State acts, should not be passed unless there
is a compelling reason in its favor. It is hard to believe
that any such compelling reason existed in the case of the statute
in question. If the enforcement of the compulsory education law,
in the City of New York, requires the organization of a Bureau
of Compulsory Education, the Board of Education can be relied
upon to establish such a bureau, but if the Board of Education
prefers to enforce the compulsory education law through some
agency other than a specially constituted bureau, it should be
permitted to do so.
It is the prerogative of the State to enact <a compulsory educa-
tion law and to hold Boards of Education responsible for its
enforcement. It should be the privilege of the Boards of Educa-
tion to determine the machinery by which such enforcement is to
be carried out, and the Board of Education of New York should
have the same privilege in this respect as is enjoyed by the other
cities of the State.
9. Conflict between Section 1102 of the Charter, which was not
specifically repealed,, and the State Education Law, relative
to the disposition to be made of the City's share of the
State school moneys, the former providing that such money
be credited to the City's general fund for the reduction of
taxation and the latter that it be credited to the Board of
Education.
Reference has been made to this matter under subdivision 3,
above. The controversy was resolved in favor of the Board of
Education, and at the piesent time, the proceeds of the State's
apportionment to the City of New York are credited to the Board
of Education. That the amounts now involved are bv no means
KEPOKT OF JOINT LEGISLATIVE COMMITTEE 89
inconsiderable is shown by the following table, giving the totals
apportioned to New York for the calendar years 1914 to 1922,
inclusive :
Amount Apportioned
Year to the City
1914 $1,923,025 00
1915 2,115,679 73
1916 2,220,730 03
1917 2,414,837 16
1918 2,321,191 13
1919 ...' 2,700,657 19
1920 5,025,570 17
1921 16,938,023 85
1922 *18,097,534 51
10. Increase from 3 mills to 4-9 mills in the amount which the
City is required annually to appropriate for the use of the
Board of Education.
The State's policy of prescribing a certain minimum tax to be
levied for local school purposes long antedates the creation of the
Greater City.
The application of this principle to the present City, however,
was first made in the Charter, which took effect in 1898, and
which prescribed a minimum of 4 mills. By Chapter 43, Laws of
1.903, this was reduced to 3 mills, the reduction taking effect in
the 1904 budget, a provision contemporaneous with the increase
of nearly a billion and a half dollars in the assessed valuation of
New York City's real estate, due to a change in the basis of
assessment. The figure remained 3 mills until the State Law of
1917 raised it to 4.9 mills.
The 3 mill tax applied to the 1903 valuations yielded, for the
purposes of the 1904 budget, $16,297,250.75, as compared with
$15,428,190.87, which was yielded for the budget of the preced-
ing year by the 4 mill tax on 1902 values, so the decrease in rate
really meant an increase of $870,000 in available funds.
The following table shows the expenditures by the Board of
Education from its current funds for school purposes from 1910,
through the first six months of 1921, and gives also the 1922
Estimated.
90 INVESTIGATION OF AFFAIRS OF ^N~E\v YORK CITY
budget appropriation from City and State sources. It shows the
tremendous growth that has taken place in the last few years
in school costs.
Year Expenditures.
1910 $28,456,945 68
1911 28,958,179 29
1912 33,791,974 40
1913 35,481,641 12
1914 38,185,495 90
1915 39,797,960 64
1916 39,708,764 22
1917 41,101,074 41
1918 43,884,893 59
1919 45,490,121 68
1920 66,194,668 04
1921 (first 6 mos.) 44,82*8,326 69
1922 *88,79'8,546 81
The first budget affected by the law increasing the minimum
provision for school purposes to the yield of a 4.9 mill tax was
that for 1918, and the amount appropriated by the City for school
purposes in that budget was $42,501,156.04, the exact amount of
the 4.9 mill yield as then computed and the approximate amount
required by the Board of Education as indicated by its expendi-
tures at the time. It seems clear, therefore, that the legislature
sought to guarantee to the City's school system, an income suffi-
cient to meet its requirements, relying on increases in assessed
valuation to provide some money at least for expansion, thus
assuring the Board of Education a reasonable degree of financial
independence. The 4.9 mill yield, however, has not proved
wholly adequate. The legislature in 1,919 and 1920 passed laws
increasing the statutory minimums for teachers' salaries. These
new schedules, when fully effective, increased the salaries of
teachers in New York City's schools by about $30,000,000 a year.
According to figures prepared by the Board of Education, the
total salary cost for teachers as of December 31, 1919, was
$37,625,157, and the cost as of December 31, 1921, for the same
staff is estimated at $67,947,108.
* Including $18,097,534.51 from the State.
KEPORT OF JOINT LEGISLATIVE COMMITTEE 91
In order to lighten the financial burden imposed by these
mandatory increases, the Legislature undertook to provide a part
of the necessary funds and levied a direct tax for educational
purposes to supplement the local city taxes.
As shown above, the State funds received by New York from
1914 to 1919, inclusive, averaged annually about $2,000,000. In
1921, however, by reason of this action by the Legislature, the
amount received totals $16,938,023 85, and the estimate for 1922
is $18,097,534.51.
But this is not enough to offset the entire additional burden
in New York, and, as a result, the schools are again placed in
financial dependence on the city authorities. The City's appro-
priation for 1922 for school purposes is $70,701,012.30, whereas
the 4.9 mill tax on 1921 valuations yields only about $50,000,000.
The Board of Education is therefore dependent en the City for
about 30% of its requirements for current running expenses, to
say nothing of its requirements for new school buildings, altera-
tions and the like. In this respect, therefore, the situation is
no better than it was in 1917, when the Board's budget was
$41,430,447.49, or nearly $16,000,000 in excess of the mandatory
3-mill tax of $25,753,057.53.
A mojt anomalous situation is thus created. The Board of
Education, which is recognized as an agent of the State by the
new Education Law, i at the mercy financially of the local city
authorities, who have it in their power completely to wreck the
school system. That this is a power that may be exercised before
long is evidenced by two facts.
The requirements of the Board of Education for funds from
City sources as set forth in the budget for 1921 amounted to
$77,946,038.77, but because, in spite of a most unusual increase
in the assessed valuations for 1921, the Board of Estimate found
that it could not appropriate the full amount it desired to for
city and county purposes and remain within the 2% constitutional
limitation as interpreted by it, it arbitrarily reduced the amount
appropriated for the Board of Education to $50,720,880.83,
leaving a deficit of $27,225,157.94 to be made up during the
year. The action of the Legislature in continuing for another
year the direct State levy for teachers' salaries made an additional
$7,225,000 available, reducing the deficit to $20,000,000.
The Board of Estimate undertook to finance this deficit by the
issue of special revenue bonds and the transfer of available bal-
92 INVESTIGATION OF AFFAIRS OF .NEW YORK CITY
ances from other appropriations, but throughout the greater part
of 192 1, the Board of Education had no assurance, other than the
statement of the Board of Estimate, that the necessary funds for
the support of the schools would be provided by the city. This
first move by the city authorities can be summarized as an arbi-
trary refusal to appropriate in the annual budget a sufficient sum
for school purposes, coupled with the undertaking to make up the
deficit from other city sources during the year.
The second fact is of more recent occurrence and it may be
summarized as a desire on the part of the city authorities arbi-
trarily to reduce the budget appropriations for the Board of Edu-
cation below requirements and to deny responsibility for the
deficit, passing it along to the State. This is evidenced by a com-
munication sent by the Comptroller to the Board of Aldermen,
on December 2, 1921, calling attention to the fact that the prob-
able tax rate for city and county purposes in two of the five
counties would exceed 2%, and that in view of the constitutional
provisions, it would be safer to reduce the budget so as to bring
the rates below 2%. He recommended that this reduction be
effected by taking $10,000,000 away from the appropriations
made for the Board of Education, saying:
"Education is a State function, and because it was a State
function the legislature increased teachers' salaries in the
City of New York at the rate of $31,000,000 per year, but
when it came to providing the means wherewith to meet this
increased outlay, the legislature did not consider that educa-
tion was a State function. It passed this liability on to the
City of New York, and, in order that a show of economy
might be made in the State's appropriation bills, the amount
provided to aid the City of New York to carry this increased
budget was less than half of the sum required.
"Unless the State is to be faithless to the cause of educa-
tion, the legislature can do no less than provide the necessary
moneys to sustain the activities in the manner that it has
required."
The significance of this is not so much the speciousness of the
argument as the fact that the exigencies of municipal finance have
led the city authorities to assume a hostile attitude toward the
city schools. The Board of Aldermen wisely rejected the Comp-
troller's recommendation, but next year, it may very well be that
the Board of Estimate, acting at the Comptroller's instance, may
REPORT OF JOINT LEGISLATIVE COMMITTEE 93
refuse to appropriate sufficient funds for the schools, and, as the
Board of Aldermen has no power to increase appropriations,
there would be no means for compelling the City to make the
necessary appropriation, so long as the statutory minimum of 4.9
mills is provided.
In connection with the Comptroller's recommendation, how-
ever, mention should be made of the fact that the Mayor testified
that he was in favor of the increased salaries for teachers, con-
cerning which the Comptroller complains, that the city's finan-
cial condition was and is such that it could not possibly provide
the money for these increases had the legislature not come to its
aid by imposing a State tax for the purpose and that the amount
to be received by the city during 1922, from State school moneys
is estimated at about $4,000,000 more than the amount of the
direct State tax which the city has had to include in the 1922
budget, so that the city gets from the State more than it pays by
about $4,000,000.
It seems highly desirable, therefore, that the Legislature take
the necessary steps to make it impossible for the City to starve
the schools at will. In doing so, however, regard should be had,
not only to the current running expenses as reflected in the appro-
priations to the general and special school funds, but also to the
requirements for new school accommodations. Only half of the
problem would be solved if the Board of Education were depend-*
ent on the City for funds for new buildings, because there is no
more reason to assume that the City, when confronted by the con-
stitutional debt limit, would treat the schools any more gener-
ously than when confronted with the constitutional limit on tax-
ing power.
The City's appropriation for the Board of Education in the
1922 budget of $70,701,012.30 represents about 7 mills on the
1921 valuation of about ten billions. An increase in the manda-
tory minimum from 4.9 mills to 7 mills would therefore insure
sufficient funds to conduct the schools at the present rates of
expenditure, provided the State continues its distribution of school
moneys in the same amount as at present. If, in addition, the
equivalent of another mill or fraction thereof were set aside by
statute for new school projects, to be provided by taxation or bond
issue, the Board of Education would have the assurance of a defi-
nite sum annually for such purposes.
94 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
The total expenditure from 1910 to the middle of 1921 for new
buildings and sites was $46,092,839.88, making an average
annua] expenditure of $4,008,073.03 during this period. This
amount has demonstrably been insufficient to keep pace with the
growing requirements of the City and it should not be a criterion
in determining the funds to be made available by the City in the
future for such purposes. On the other hand, the City's financial
condition is such that it cannot be expected to make up at once the
deficiencies of prior years in school construction. The Board of
Education could easily and advantageously spend many more
millions than the City could furnish. It is necessary, therefore,
to effect a compromise based on the City's financial ability and the
requirements of the schools and adequate to give the Board of
Education the necessary financial independence.
11. The inclusion within the State's educational system, of City
Boards of Education, including the Board of Education
of the City of New York and the subordination of the
municipal authorities to the State in matters of school
administration.
The foregoing discussion demonstrates that the apparent at-
tempt by the new State Law of 1917, to secure this change in the
relationship between the City, the Board of Education and the
State, was not successful. The present division of responsibility,
while differing from the preceding division of responsibility, is-
none the less embarrassing and is not conducive to the efficient
administration of the schools. The history of public education in
New York State shows that the State has increasingly concerned
itself with the education of its children. Generally speaking,
however, its concern has been to see to it that the local authorities
fulfilled their responsibilities. The details of school administra-
tion were left to communities, while the State prescribed general
requirements, supervised the carrying out of these requirements,,
appropriated money to help meet these requirements and passed
laws which sought to guarantee a proper education to its future
citizens. Experience seems to show that this is a wise position
for the State. It cannot successfully and should not centralize in
its own hands the administrative control of local schools. It can,
however, exercise general supervision, establish minimum require-
ments, set up local agencies to administer the affairs of local
schools, and see to it that these agencies are not interfered with
KEPORT OF JOINT LEGISLATIVE COMMITTEE 95
in the performance of their duty. Education is not a State func-
tion, it is a State responsibility. The guaranteeing that every
child in every community shall have an opportunity for education,
however, is a State function and so is the exercise of compulsion
on local communities to provide adequate educational facilities.
The State can enunciate that principle and it can establish in
New York City a Board of Education with complete financial
independence, subject to restrictions imposed by the State and the
State only. The City can be compelled to furnish the necessary
funds, but in the interests of the taxpayer these funds must be
provided out of the 2 per cent tax which the City may, under the
constitution, levy for city and county purposes.
DEVELOPMENT OF PUBLIC EDUCATION IN THE
STATE AND CITY OF NEW YORK PRIOR TO 1897.*
HISTORICAL DEVELOPMENT OF THE EDUCATIONAL SECTION OF
THE STATE CONSTITUTION
Article IX, section 1 of the Constitution of the State of New
I r ork reads as follows :
" The Legislature shall provide for the maintenance and
support of a system of free common schools, wherein all the
children of this State may be educated."
This section was added to the Constitution by the Constitu-
tional Convention of 1894 upon the recommendation of the Com-
mittee on Education which reported an educational article of
which the foregoing was the first section. The Committee's report
contained the following statement:
" The present Constitution is silent upon the vital point
of the establishment and maintenance of a system of free
common schools. It may be urged that no imagination can
picture this State refusing to provide education for its
children, and for this reason the declaration which your com-
mittee have reported in section 1 might, no doubt, be omitted
without endangering the stability of our present system of
education. But the same reasoning would apply to many
other matters though fundamental ; and it is a significant fact
that within the last half century of constitutional revision
no other State of the Union has considered it superfluous or
unwise to make such an affirmation in its fundamental law.
Your committee, therefore, recommends the adoption of
*Mbst of the historical material presented here has been taken from Lin-
coln's " Constitutional History of New York," vol. Ill, pp. 475-580, and from
Palmer's " The New York Public School." In many instances sentences have
been borrowed bodily, and, generally speaking, there has been little more than
summarization and rearrangement of the material collected by these authors.
Material has also been taken from the School Inquiry Report published in
1913 by the Board of Estimate, especially from vol. Ill, pp. 45-108.
[96]
REPORT OF JOINT LEGISLATIVE COMMITTEE 97
section 1 as an explicit direction to the legislature to pro-
vide for a system of free common schools wherein all the
children of this state may be educated. This requires, not
simply schools, but a system; not merely that they shall be
common, but free, and not only that they shall be numerous,
but that they shall be sufficient in number, so that all the
children of the state may, unless otherwise provided for,
receive in them their education. ~No desire to confine the
new Constitution to the narrowest possible limits of space
should prevent the adoption of an enactment declaring in the
strongest possible terms the interest of the state in its com-
mon schools. Whatever may have been their value hereto-
fore, and language has been strained to the utmost in apply-
ing to them terms of praise, their importance for the future
cannot be overestimated. The public problems confronting
the rising generation will demand accurate knowledge and
the highest development of reasoning power more than ever
before ; and, in view of the state's policy as to higher educa-
tion, to which reference will presently be made, too much
attention cannot be called to the fact that the highest, leader-
ship is impossible without intelligent following, and that
the foundation of our educational system must be permanent,
broad, and firm if the superstructure is to be of real value."
The Constitutional Convention of 1894 found an educational
system in two parts, one culminating in the University Law cf
1892 and the other in the Common School Law of 1894. In
addition, there were numerous independent statutes relating to
both departments of education. The Convention combined both
branches in one educational article and the state electorate by
adopting the revised constitution definitely declared that ele-
mentary, secondary and higher education should be maintained
at public expense within limitations prescribed by the State
Legislature. By this action there was incorporated in the funda-
mental law of the State a policy which, as a matter of fact, had
existed for many years through legislation. The constitutional
provision unified the two systems above referred to, but both
systems were prior to 1894 subject to State control.
The following brief sketch of the development of a public edu-
cational policy in the State of New York shows the gradual forma-
tion of a new conception that public education was a vital con-
cern of the State.
98 INVESTIGATION OF AFFAIRS OF Jfajw YORK CITY
Dutch Colonial Period
The Dutch were firm believers in education and carried to the
new world their determination to provide for the instruction of
their youth. An ofiicial school and school master were provided
in New Amsterdam as early as 1633. During the Dutch control
of New York the expense of maintaining the schools was some-
times paid in part from the treasury of the Dutch West India
Company, sometimes from excise moneys, sometimes, apparently,
by general tax and, in addition, teachers derived a part of their
income from direct payment by pupils. Keligious and secular
instruction were combined in the same course and the same per-
son was often both minister and school master. The Dutch West
India Company began the administration of the colony which it
was permitted to establish in America by invoking the direct aid
of the minister and the school master. A union of church and
state was not then deemed objectionable. But while the govern-
ment through the church and sometimes by direct taxation
encouraged the formation of schools, it did not consider itself
responsible for the development of a consistent and comprehensive
educational policy for the children of the colony.
English Colonial Period, 1664 1776
The transfer of Xew York from Dutch to English control in
1664 had little immediate effect on the educational policy of the
colony. The Dutch policy was not interrupted, but as the Eng-
lish apparently did not regard education as an essential subject
of public administration, little was done to foster schools at pub-
lic expense. English teachers were licensed to teach schools, but
usually without public aid. The colonial government acting
under orders from the crown tried to keep the control of educa-
tion as a prerogative of the Church of England, and, accord-
ingly, under the instructions of colonial governors school masters
were permitted to teach only if licensed, first by the Archbishop
of Canterbury and later in the history of the colony by the Bishop
of London. During the first few years of English jurisdiction
school masters were also required to obtain a civil license from
the governor, but this practice later fell into disuse. Education,
while not discouraged by the government, was left largely to 1
private enterprise, but under public control, and the schools were
maintained either directly or indirectly by private contributions
including the direct payment of tuition and the funds admin-
REPORT OF JOINT LEGISLATIVE COMMITTEE 99
istered by some society organized for that or similar purposes.
The English " Society for the Propagation of the Gospel in For-
eign Parts/' for example, carried on an extensive educational
work in the colony, establishing schools, appointing teachers and
often supporting them out of its own treasury. But while the
schools were, during the latter half of the English Colonial period
under the general care and supervision of this Society, the gov-
ernment kept its hand on the school system directly and through
the instrumentality of the church by the requirements as to the
licensing of teachers referred to above, and not by direct legis-
lation of a general character.
Only two statutes were enacted by the English Colonial gov-
ernment of Xew York relating directly to education and neither
of these disclosed any intention to establish a public school sys-
tem. The first was passed in 1702 and recited that the munici-
pal authorities of Xew York had represented to the general
assembly the importance of establishing in that city a free school.
The assembly thereupon made provision for a grammar school
and directed that an annual tax of 50 be raised to maintain the
school. The act was to continue in force seven years. It was not
then extended. The second statute was passed in 1732 and
authorized a school in Xew York for the teaching of Latin,
Greek and mathematics. This school was to be free, its expenses
being paid from moneys received from licenses to hawkers and
peddlers. The act was limited to five years. It was then con-
tinued for another year, but was not again renewed. This seems
to have been the last attempt to establish public schools during
the Colonial period.
Education under Hie First Constitution, 1777 1821
Education was given no place in the first constitution. The
Legislature was, therefore, left free to act as it saw fit with
respect to schools. The Revolutionary War, of course, absorbed
much if not most of the Legislature's energy and the first definite
recognition of school needs was tacked on to an act providing for
the raising of t\vo regiments for volunteer service and for boun-
ties of public land to encourage enlistments. By this act (Chap-
ter 32, Laws of 1781) the State reserved in each township five
hundred acres of public land for the support of the gospel and
three hundred and sixty acres for the use of the school. The
policy of appropriating public lands for these purposes was con-
tinued by subsequent legislation, and, according to a report by
100 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
the Superintendent of Public Schools in 1839, there had been
thus reserved up to that time as gospel and school lands 47,620
acres. This policy obviously was not applicable to all parts of the
State and necessarily could have only a limited effect. It was
only an incident in the State's educational development.
What is said to be the earliest official declaration of a state
educational program is found in a statement by Governor George
Clinton to the special session of the Legislature called in 1782
to devise means for more vigorous prosecution of the war. He
is quoted as having said :
" * * * it is the peculiar duty of a government of a
free state where the highest employments are open to citi-
zens of every rank to endeavor by the establishment of
schools and seminaries to diffuse that degree of literature
which is necessary to the due discharge of public trusts.
You must be sensible that the war has occasioned a chasm
in education extremely injurious to the rising generation,
and this affords an additional consideration for extending
our earliest care to their instruction."
In 1784 the Governor repeated his views and the Legislature
passed an act to establish a university under a Board of Regents.
If this university had been erected on a broad foundation with-
out reference to any particular institution then existing, it could
have supervised all education, but the intervention of Kings Col-
lege brought about amendments which concentrated 011 Columbia
College (the later name for King's College) the energies of
friends of education in the State. This law of 1784 was
amended, materially altered in 1787 and in the latter form was
the basis of the University Law of 1892.
The Committee of Regents which recommended the modifica-
tion of 1787 in the University Law made the first direct reference
to public common schools as such, stating that:
" They feel themselves bound in faithfulness to add that
the erecting of public schools for teaching reading, writing
and arithmetic is an object of very great impoTtance which
ought not to be left to the discretion of private men, but be
promoted by public authority."
The amended law, however, contained no provision for the
organization of primary education.
The first free common school established by statute in a settled
portion of the State was provided for by Chapter 41 of the Laws
REPORT OF JOINT LEGISLATIVE. C0:k&l.?Tfi*E> * //-I 01
of 1791. The people of Clermont asked authorization from the
Legislature for the use for school purposes of the surplus of excise
moneys not needed for the support of the poor, and this authority
was granted by the above-mentioned act.
In 1793, 1794 and 1795 the Regents repeated their recom-
mendation for the establishment of public schools for the teaching
of reading, writing and arithmetic, and the Legislature in 1795
passed a Common School Law (Chapter 75) which appropriated
20,000 annually for five years and required each city and county
to raise by tax a sum equal to one-half the amount apportioned
to it by the State. These two sums constituted the local school
fund. There was no rate bill. This law expired in 1800 and was
not renewed. The Legislature of 1801, however, provided for a
lottery to raise $100,000, one-half of which was to be used by the
Regents and the other half to be used for the support of the com-
mon schools as the Legislature might direct.
In 1802, 1803 and 1804 the Governor recommended again that
the Legislature continue the system of common schools. In 1805
Governor Lewis sent a special message to the Legislature urging
the adoption of a liberal policy toward education and recom-
mending that 1,500,000 acres of unappropriated land then owned
by the State be devoted to educational purposes; the funds real-
ized from the sale thereof to be placed under the supervision of the
Regents ; the interest to be used for the support of colleges, com-
mon schools and " perhaps of academies." This plan, if adopted,
would have unified the State's educational system under one head,
the Regents. The Legislature, however, included in the new law
only that part of the plan relating to a common school fund and
set aside only 500,000 acres of unoccupied land for establishing
the common school fund. The creation of this fund was, appar-
ently, the only result of Governor Lewis' plan to establish a gen-
eral system of education.
In 1810, and again in 1811, Governor Tompkins urged legis-
lative action for popular education, and in the latter year the
Legislature appointed a commission to study the subject and
report. The report was submitted in 1812 accompanied by a bill
which, with modifications, became Chapter 242. This law pro-
vided for a Superintendent of Common Schools, for the distribu-
tion of the interest of the common school fund; authorized the
election of town commissioners and inspectors of schools; re-
quired teachers to be examined and licensed by the inspectors:
provided for school districts in towns, and required a local tax
102 T-isvKSTKjAtnEOj; 'or AFFAIRS OF NEW YOKE: CITY
for school moneys in addition to the fund distributed by the
State with the limitation that the offer of State aid must have
been accepted at a town meeting, in which case a sum equal to
the State apportionment was to be raised by a town tax. The
town might also raise an additional sum. These amounts con-
stituted the local school fund. There was no rate bill. This act
vvas revised and repealed in 1814. By the new act the towns
were required to raise by tax an amount at least as great as the
amount of the State apportionment, and provision was made for
the rate bill which was used to collect money for teachers' salaries
in excess of the amount of the local school fund. The rate bill
was continued in the revision effected by Chapter 161, Laws of
1819. The office of Superintendent of Common Schools was
abolished by Chapter 240, Laws of 1821, and his functions trans-
ferred to the office of the Secretary of State.
Education under the Second Constitution, 1S22-1SJ+6
The Constitutional Convention of 1821 gave but little atten-
tion to the subject of education. The common school fund was
protected and was made perpetual. Its foundation was enlarged
to include the proceeds of all the State lands not otherwise appro-
priated. Except for these provisions, however, the new constitu-
tion contained no educational material, but during its life con-
siderable legislation on this subject was enacted, much of it hav-
ing to do with the training of teachers. By Chapter 133 of the
Laws of 1843 the Legislature abolished the offices of Commis-
sioner and Inspector of Common Schools and created the office
of Town Superintendent of Schools, to be chosen annually by the
people. The same law authorized the State Superintendent to
issue teachers' certificates .which could be used anywhere in the
State and were valid until revoked. This act completed the
policy of supervision by Superintendents, including the State
Superintendent, Deputy County Superintendents and Town
Superintendents.
Prior to 1846 several separate free school laws were enacted.
But, as a general rule, parents were required to pay a separate
and additional tax (rate bill) for the instruction of their children,
if the public money was not sufficient to pay teachers' wages.
Poor people might, however, be relieved from this additional
charge.
A resolution was offered in the Assembly of 1846 requesting
the Committee on Colleges, Academies and Common Schools to
REPOKT or JOINT LEGISLATIVE COMMITTEE 103
report on the expediency of providing free schools in all cities
and also in all incorporated villages with a population of 10.000
or more. The Committee reported itself in favor of the idea
but advised postponing action until the Constitutional Convention
then about to meet could consider the matter.
Education under the Third Constitution, 1847-1894
The Constitutional Convention in 1846 considered the matter
of free public education and on the day before adjournment
adopted two sections to be submitted to the people separately and
not as part of the Constitution. One section read:
" The Legislature shall provide for the free education and
instruction of every child in the state in the common schools
now established or which hereafter shall be established
therein."
The other section related to taxation. These two sections, how-
ever, were reconsidered by the Convention later in the same day
and the earlier action reversed. The Convention struck out the
free school provisions by a vote of 61 to 27.
Numerous petitions were submitted to the Legislature of 1849
for a general free school law. The Legislature responded and
enacted a law providing that:
" Common schools in the several school districts in this
state shall be free to all persons residing in the district over
five and under twenty-one years of age " and that " free and
gratuitous education shall be given to each pupil " in all
public schools.
A free school law was such a radical departure from the exist-
ing policy of the State, however, that the Legislature decided to
submit this new law to the electors. It was approved by them at
the November, 1849, election by a vote of 249,872 to 91,951 and
became effective January 1, 1850. The constitutionality of the
law was attacked because of the provision requiring its submis-
sion to the people before becoming effective, and in 1853 the
Court of Appeals held it to be unconstitutional (8 N. Y. 483).
This decision had little practical effect because the law had been
repealed in 1851, many complaints having been made of the
oppressive tax burden on account of free schools. Chapter 151
of the Laws of 1851 was enacted to provide relief and restored
the rate bill. In 1855 Governor Clark recommended that the rate
bill be abolished and that schools be made entirely free, but the
104 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
revised school law of 1864 (Chapter 555) continued it in force.
In 1867 Governor Fenton made a similar recommendation and
the Legislature by Chapter 406 did abolish all rate bills, thus
making the schools really free.
In 1853 (Chapter 433) the Legislature sought to encourage
the establishment of schools by providing for the union of two or
more districts, or parts of districts, in one school under the imme-
diate supervision of a Board of Education. These union free
schools, while in their general character common schools, might
have an academic department. Thus there was a union of common
and academic education in the same school. The academic de-
partment was, however, under the general supervision of tlio
Regents. In other respects the Board of Education had the
"superintendence, management and control of the school." This
law did not specifically give the Superintendent of Common
Schools any supervision over a union school but laws relating to
the powers and duties of trustees of common schools .were made
applicable to boards of education.
The Superintendent of Public Instruction whose office was cre-
ated by Chapter 97 of the Laws of 1854 was practically the suc-
cessor of the former Superintendent of Common Schools. He
was specifically required to
" visit as often as may be practicable such and so many of
the common schools, academies and other literary institu-
tions of the state as he may deem expedient ; to inquire into
the course of instruction, management and discipline of such
institutions, and to report the results of such visitation and
inspection annually to the Legislature, with such recom-
mendations and suggestions as he may deem suitable. 7 '
In 1856 -Governor Clark recommended the abolition of the
office of Town Superintendent and the creation of local Boards of
Education. He also urged the more thorough supervision of
schools, and the Legislature, by Chapter 179 of the Laws of 1856,.
created the office of School Commissioner in each assembly dis-
trict except in the counties of New York and Kings, to whom was
given the general power of visitation, inspection and supervision
of common schools in his district. He was also authorized to
grant teachers' licenses and to hold teachers' 7 institutes subject to
rules prescribed by the state superintendent. The same act abol-
ished the office of Town Superintendent of Common Schools.
EEPOKT OF JOINT LEGISLATIVE COMMITTEE 105
By Chapter 555 of the Laws of 1864 the general acts relating
to public instruction were revised and consolidated. Union
schools were made subject to the visitation of the Superintendent
of Public Instruction, who was also made responsible for the
" general supervision of its board of education and their man-
agement and the conduct of all its departments of instruction."
The Superintendent was also empowered to remove members of
^ Board of Education. As a result, a double supervision was
established for union schools with academic departments, the
Superintendent being one of the instruments and the Board of
Regents the other. And, similarly, there was a double inspection
and distribution of State funds. This duplication of function
continued until the unification act of 1904.
The Convention of 1867 included a free school provision in
its draft of the Constitution. The Commission of 1872 con-
sidered but did not adopt propositions relating to compulsory
education and free common school instruction. The Legislature
of 1876 passed a free school amendment to the Constitution, but
it was not agreed to by a subsequent Legislature and was not,
therefore, submitted to the people for acceptance. Not until
1894 were effective steps taken toward the inclusion of a free
education section in the state constitution. The constitutional
convention of that year adopted the section quoted at the begin-
ning of this sketch and that section has remained ever since as
a part of the state constitution.
Summary
The foregoing summary of the development of constitutional
free public education in New York shows clearly that the pro-
cess was not a consistent one. The present system is an outgrowth
of a variety of conflicting ideas and tendencies. Most of the
progress has been of comparatively recent years.
The Dutch Colonists had a lively regard for the value of edu-
cation, but it was not free state education. It was church educa-
tion sanctioned and encouraged by the state. The English
Colonists had no conception of free public education. There were
no public schools at the end of the colonial period. The general
policy was to leave education to individual effort. The govern-
ment felt itself absolved from responsibility. If the people
desired schools they could have them by paying for them. The
church would license proper teachers and the schools could be
supported by private contributions.
106 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
This was me educational inheritance of the new State. The
first education law passed by the new state government had
to do with the establishment of a state university. There was
no recognition of any need for state common schools. The evi-
dent purpose of the first University Law was to establish a private
educational institution and not to institute a comprehensive sys-
tem of public education. The differentiation between the two
ideas is shown by the fact that when the Legislature passed the
first Common School Law (1795) the Regents of the state uni-
versity were not made the instrumentality for administering the
new law. The university had to do with private educational
institutions while the state government was then about to try
an experiment in public education. The Legislature, accordingly,
left the university at one side and used means with which they
were familiar, namely, the township governments. Township
government was a colonial inheritance and was recognized and
perpetuated by the first constitution of the State, which guar-
anteed to the people of the town the right to elect their own officers.
The towns themselves had an organized government and it was
natural that the State should resort to these local governments
for the machinery to carry out the new plan. It is also probable
that the New England township school policy had an influence
in shaping the New York statute. Massachusetts in 1789, six
years before the New York law, had enacted a common school
law by which each town was directed to maintain public schools.
There was no central administration at all, the whole subject,
including taxation, being committed to the people of the town,
who might subdivide the town into school districts. The New
York law was constructed on this model. The town was made
the basis of school administration and taxation, and local officers
were made responsible for the enforcement of the law. The
New York statute was strikingly different in one respect, how-
ever, in that the state contributed funds from its treasury for the
support of local schools, while in Massachusetts the schools were
maintained wholly at local expense. In neither State was there
any central state supervision.
A speech by Governor Clinton in 1802 indicates that the first
Common School Law was a failure. The revival of the common
school plan in 1812 included the idea of local supervision but
added the element of state supervision by a Superintendent of
Common Schools. The duties of this office were transferred to the
REPORT OF JOINT LEGISLATIVE COMMITTEE 107
Secretary of State in 1821, who administered them until 1854
when the office of State Superintendent of Public Instruction was
created. Since 1812 the State has maintained an unbroken policy
of supervising public schools through one state officer or another.
The growth of educational policy in the state of New York
was rapid in the latter part of the nineteenth century. The State
increasingly assumed responsibility for the education of its
citizens. Years before the adoption of the educational section
of the Constitution of 1894 the Legislature was exercising its
rights with respect to public education, and this gradual develop-
ment of the idea of state control over this matter became crystal-
ized in the fundamental law of the state as Article IX of the
Constitution of 1894.
THE EVOLUTION OF PUBLIC EDUCATION IN THE PRESENT CITY
OF NEW YORK
Up to 1898 when the Greater New York Charter (Chapter 378
of the Laws of 1897) became effective, the history of education
in what is now the City of New York w.as the history of the
several independent communities which, by consolidation at that
time, or by earlier consolidation with the constituent munici-
palities, became the Greater City. Before treating of the devel-
opment subsequent to 1898, therefore, there will be outlined the
growth of a public educational system in the former City of New
York, in the City of Brooklyn and very briefly in what are now
the other two boroughs. These sketches should afford a suffi-
ciently clear picture of the experimental and inconsistent char-
acter of the legislative and other provisions through which the
present city's educational system was developed.
The earliest history of education in the territory now con-
tained within the City of New York is little different from the
general history of the State. Up to the Revolutionary War and
for some years thereafter there is nothing of great significance
to differentiate the treatment accorded to schools in the City from
that accorded to schools outside the City. But early in the nine-
teenth century the individual school history of the City began,
and it is at that time that the following outline commences.
The Former Ciiy of New York
In 1805 there was a new and strictly local development in
educational policy in the shape of the formation of a society
incorporated by the Legislature under an act entitled " To Incor-
108 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
porate the Society Instituted in the City of New York for the
Establishment of a Free School for the Education of Poor Chil-
dren who do not Belong to or Are not Provided for by any
Eeligious Society. 77
The school opened by this Society in 1806 with funds pro-
vided by private subscription marked the beginning of what in
later years became the public school system of the City. It scon
became evident that this first school must be followed by others,
and in 1807 the Society obtained an appropriation from the
Legislature and also assistance from the municipal authorities
to enable it to furnish additional educational facilities. These
early schools were, however, of a strictly eleemosynary character.
In 1808 the Society's name was changed by the Legislature to
" The Free School Society of New York " and its powers were
extended to cover "all children who are the proper objects of a
gratuitous education." The first apportionment of the State
common school fund established in 1805 was made in 1815 and
the Free School Society then received $3,708.14 as its share of
the amount paid to the City and County of New York. Under
the Act of 1813 permitting the city to participate in the common
school fund, the City's portion was paid to the Free School Society,
the Orphan Asylum Society, the Society of the Economical School
in the City of New York, the African. Free School and to such
"incorporated religious societies in said City as now support or
hereafter shall establish charity schools within the said City who
may apply for the same." The State funds thus apportioned
were dedicated solely to the payment of teachers' salaries.
In 1817, however, the Free School Society, finding that the
Lancasterian system was so economical that the State moneys
were more than enough for teachers' salaries, secured permission
from the Legislature to apply the surplus to the erection of build-
ings or any other needful purpose. In 1822 the Bethel Baptist
Church, which participated in the common school fund under the
law of 1813, secured a similar dispensation from the Legislature.
Considerable alarm was felt by the Free School Society and by
the other church schools lest this lead to a perversion of State
school funds to sectarian rather than to school purposes. Repeated
attempts were made to have the Legislature repeal the exemption
made in favor of the Bethel Baptist Church, but without success.
The scene of the controversy was moved from Albany to New
York by the passage of a law in 1824 placing the distribution
REPORT OF JOINT LEGISLATIVE COMMITTEE 109
of the school fund for ^ew York City in the hands of the Com-
mon Council. In 1825 the Common Council passed an ordinance
excluding all religious societies from participation in the income
from the common school fund, leaving only the Free School
Society, the Mechanics' Society, the Orphan Asylum Society and
the African Free Schools as beneficiaries.
The Free School Society was eager to extend the field of its
operations and in 1824 suggested that its schools which had
suffered from the stigma that they were charity schools should
also receive as pupils children of parents able and willing to pay
small sums for instruction. In 1826 the Legislature granted a
new charter whereby the Society's name was changed to " The
Public School Society of Xew York/ 7 whereby the Society was
permitted to charge a moderate fee for instruction, provided that
no child be denied the benefits of education because unable to
pay (this pay system proved unsuccessful and was abolished in
1832), and whereby the Society was authorized
"to convey their school edifices and other real estate to the
Mayor, Aldermen and Commonalty of the City of New York,
upon such terms and conditions and in such forms as shall
be agreed upon between the parties, taking back from the
said corporation a perpetual lease thereof upon condition
that the same shall be exclusively and perpetually applied
to the purposes of education."
The Society was not satisfied with the adequacy of the system
of schools existing in 1828. It estimated that 12,000 children
between five and twelve years of age were entirely without means
of instruction and it stated that the principle which had led to
the recent change from free schools to public schools should be
extended so that schools " should be supported from public reve-
nue, should be public property, and should be open to all, not as
a charity but as a matter of common right. " The specific recom-
mendation was then made that a tax be levied of half a mill upon
the dollar of assessed city property, and a vigorous effort was
made to arouse public sentiment in favor of this tax measure, the
result being the enactment by the Legislature in 1829 of a tax
law levying a local tax of one-eightieth of one per cent.
A controversy as to the application of public school moneys to
the support of schools under the control of religious societies com-
menced in 1840 and had far-reaching consequences. The Roman
Catholic churches which maintained free schools requested from
110 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
the Common Council a share of the school moneys. Similar
requests were made by a Hebrew congregation and by the Scotch
Presbyterian church. They were all strenuously opposed by the
Public School Society and were denied by the Board of Assistant
Aldermen. The Catholics then petitioned the Board of Alder-
men, which after a public hearing on the matter, denied the
request.
The Legislature was the next point of attack and lengthy mem-
orials were submitted by the proponents and opponents of the
plan. All of these documents were referred to John C. Spencer,
the Secretary of State and ex-officio state Superintendent of Com-
mon Schools. Mr. Spencer studied the entire problem and then
outlined a plan of education in New York City providing for the
election of a Commissioner of Common Schools in each ward ; for
the extension of the general school laws of the State to the City,
with certain modifications; for the transfer to the elected Com-
missioners of " the schools of the Public School Society and the
schools of the other associations and asylums now receiving the
public money as schools under their general jurisdiction, leaving
the immediate government and management of them to their
respective trustees and directors" ; for the establishment, by the
Commissioners, of schools in other parts of the city as district
schools, and for the payment of the public school money by the
Chamberlain directly to the Commissioners. The Legislature post-
poned action until January, 1842, and the school question
became an important issue in the city campaign.
In his annual message for 1842 Governor Seward gave con-
siderable space to the school problem in New York City, saying
among other things:
"Happily in this, as in other instances, the evil is dis-
covered to have had its origin no deeper than in a departure
from the equality of general laws. In our general system of
common schools, trustees chosen by tax-paying citizens, levy
taxes, build school-houses, employ and pay teachers, and
govern schools which are subject to visitation by similarly
elected inspectors, who certify the qualifications of teachers
and all schools thus constituted participate in just propor-
tion in the public moneys, which are conveyed to them by
commissioners also elected by the people. ... In the
public school system of the city, one hundred persons are
trustees and inspectors, and, by continued consent of the
REPORT OF JOINT LEGISLATIVE COMMITTEE 111
Common Council, are the dispensers of an annual average
sum of $35,000, received from the Common School Fund of
the State, and also of a sum equal to $95,000, derived from
an undiscriminating tax upon the real and personal estates
of the City They build school-houses, chiefly with public
funds and appoint and remove teachers, fix their compensa-
tion, and prescribe the moral, intellectual, and religious
instruction which one-eighth of the rising generation of the
State shall be required to receive. Their powers, more effec-
tive and far-reaching than are exercised by the municipality
of the City, are net derived from the community whose chil-
dren are educated and whose property is taxed, nor even
from the State, which is so great an almoner, and whose
welfare is so deeply concerned, but from an incorporated
and perpetual association, which grants, upon pecuniary
subscription, the privileges even of life membership, and
yet holds in fee simple the public-school edifices, valued at
eight hundred thousand dollars. Lest there might be too
much responsibility, even to the association, that body can
elect only one-half of the trustees, and those thus selected
appoint their fifty associates. The philanthropy and patrio-
tism of the present managers of the public schools, and their
efficiency in imparting instruction, are cheerfully and grate-
fully admitted. 'Nor is it necessary to maintain that agents
thus selected will become unfaithful, or that a system that
so jealously excludes popular interference must necessarily
be unequal in its operation. It is only insisted that the insti-
tution, after a fair and sufficient trial, has failed to gain
that broad confidence reposed in the general system of the
State, and indispensable to every scheme of universal edu-
cation. ... I submit, therefore, with entire willingness to
approve whatever adequate remedy you may propose, the
expediency of restoring to the people of the City of "New York
what I am sure the people of no other part of the State
would, upon any consideration, relinquish the education of
their children. For this purpose, it is only necessary to vest
the control of the common schools in a board to be composed
of commissioners elected by the people; which board shall
apportion the school moneys among all the schools, including
those now existing, which shall be organized and conducted in
conformity to its general regulations and the laws of the
State, in the proportion of the number of pupils instructed.
112 INVESTIGATION OF AFFAIRS OF NEW YoEK ClTY
It is not left doubtful that the restoration, to the common
schools of the City, of this simple and equal feature of the
common schools of the State, would remove every com-
plaint, . . ."
By chapter 150, Laws of 1842, entitled "An act to extend to the
City and county of New York the provisions of the general act in
relation to common schools " the Legislature established the tirst
Board of Education for the City. The statute provided that there
should be elected in each ward at special elections held in June,,
two Commissioners of Common Schools, two Inspectors of Com-
mon Schools and five Trustees of Common Schools. The Com-
missioners were to constitute a Board of Education. The Board
had very little power, however. Its importance can be measured
by the fact that the law required it to meet at least once in three
months. The real authority was vested in the ward officers. Under
the statute each ward was to be considered as a town for the pur-
poses of school administration; the ward trustees initiated new
school projects and these projects, if approved by the respective
inspectors and commissioners, became binding on the city. The
supervisors cf the city and county were required to raise annually
by tax a sum equal to the amount of the State apportionment of
school moneys, plus a special tax of one-twentieth of one per cent
of the total assessed valuation, plus such further amount as was
necessary. The Board of Education distributed the school moneys
among the wards on the basis of average attendance, and the
ward officers had charge of the expenditure of the funds. The
schools of the Public School Society and those of other incorpo-
rated societies were continued under the management of their
respective trustees. It was further provided that no school should
receive any portion of the school moneys in which " any religious
sectarian doctrine or tenet shall be taught, inculcated or practiced."
This act proved unsatisfactory and was, therefore, amended
in 1843 and 1844. By chapter 320, Laws of 1844, passed May 7,
1844, the same school officers were provided for as in the first
act, but with a transfer of powers from the ward officers to th&
central Board of Education. New school projects deemed desir-
able by the ward officers had to be submitted to the Board of
Education for approval before they became effective, with the-
provision that appeals from the Beard's decision could be made
to the State Superintendent of Common Schools whoee dsterm ina-
tion was binding for one year. A form of local mprrnricn.
HEPORT OF JOINT LEGISLATIVE COMMITTEE
also established under this act in that it authorized the Board
of Supervisors to appoint a County Superintendent of Common
Schools for a two-year term. The compensation of this officer
was fixed at $2.00 a day and necessary expenses. The schools
established under the Acts of 1842, 1843 and 1844 were desig-
nated as ward schools.
But the double system of schools and of public and private
school control was not a happy one. There was friction between
the Board of Education and the Public School Society and in
1846 the Board questioned the Society's right to erect new school-
houses. A hearing was held and the Board decided that since
the Act of 1844 the Society had had no such right. The Society
appealed to the Legislature which in 1848 passed a law legalizing
those schools which the Society had established since May 7,
1844, but providing that it should establish no others without the
consent of the Board of Education.
In 1851 the Legislature passed an act (Chapter 386) "to
amend, consolidate and reduce to one act the various acts relative
to the common schools of the City of New York." By this act
the powers of the Board of Education were materially enlarged;
school funds were deposited in the city treasury and withdrawn
by the Board as a whole instead of being handled by the separate
commissioners. The Board was given authority to make rules
and regulations to secure economy and accountability and was
authorized to appoint a City Superintendent of Schools, Assistant
Superintendents and a Superintendent of School Buildings. For
the past ten years there had been a County Superintendent of
Schools elected by .the Board of Supervisors, but he was not
directly amenable to the Board of Education. The City Superin-
tendent was now empowered to visit schools, inquire into all mat-
ters pertaining to the administration thereof and to advise with
the trustees. The same school officers were continued but their
terms of office were adjusted to a change made by an earlier
statute, whereby the special June elections were abolished and
provision made for the election of school officers at the general
elections. The school system was really established on a pretty
independent basis by this law. One very significant provision
required the City to raise annually by tax not only the equivalent
of the State apportionment as prescribed by the general State
law, and not only one-twentieth of one percent on the assessed
valuations as prescribed by another special statute, but also " such
114 INVESTIGATION" OF AFFAIRS OF NEW YOEK ClTY
additional sums as the Board of Education * * * shall have
reported to be necessary. 77
In 1853 the Legislature ended the dual control of the City's
public schools by joining the schools of the Public School Society
and those of the Board of Education and providing for the trans-
fer to the City of all the property of the Public School Society.
TEe same law provided for the appointment by the Society from
among its trustees of fifteen commissioners of common schools
to hold office until January 1, 1855, and also for three trustees
of common schools "for each ward of said City in which one or
more of the schools of said Society ,are now established 77 to serve
until the first of January, 1855, 1856 and 1857, respectively, and
for the merging of its schools into the system of common schools
established by law. In 1853, therefore, the Board of Education
consisted of 59 members, two commissioners from each of the 22
wards and the 15 representatives of the Public School Society.
The latter remained in office until January 1, 1855, when the
number of commissioners again became 44. The law also limited
to $4.00 per pupil the amount which the Board of Education
could require annually from the City in addition to the equivalent
of the State apportionment and to the yield of the special tax of
one-twentieth of one per cent.
Nine years later, in 1864, an act was passed establishing seven
school districts in the City of New York and reducing the Board
of Education from 44 members elected by wards to 21 members
elected by districts, each district to elect one commissioner of
common schools each year. The new law also reduced the num-
ber of trustees electe'd in each ward from eight to five, provided
for three inspectors in each of the seven districts to be named by
the Mayer subject to confirmation by the Board of Education.
The power of appointing teachers and janitors was retained by
the trustees, but nominations of principals and vice-principals
made by the trustees were subject to approval by the Board of
Education, and the Board was also given authority in the matter
of the removal of teachers.
A measure was introduced in the Legislature of 1867 which,
although it failed of passage, deserves mention at the present
juncture. It provided for the abolition of the Board of Educa-
tion, the trustees and the inspectors and created a commission of
seven, termed the Metropolitan Board of Instruction, and
appointed by the Governor and the Senate. This was to be a
paid board and its members were to hold office for eight years.
REPORT OF JOINT LEGISLATIVE COMMITTEE 115
In 1869 the Legislature passed an act providing for a Board
of Education of twelve members who were to be appointed by the
mayor and to serve until December 31, 1871. It was further
provided that at the general election of 1871 twelve Commis-
sioners of Common Schools should be voted for on a general ticket,
recognition being given to the principle of minority representa-
tion. This law was repealed in 1870, so that the election pro-
vided for was never held.
The Act of 1870 "to reorganize the local government of the
City of New York " was amended in 1871 by Chapter 574, which
created a Department of Public Instruction as one of the depart-
ments of the city government, and turned over to it all the powers
and duties of the Board of Education. The existing Board was
legislated out of office and provision made for the appointment
by the Mayor of twelve commissioners for terms of five years,
recognition being given to the principle of minority representa-
tion. The Mayor was also authorized to appoint the school trus-
tees and inspectors. This law did away with the machinery of
ward and district representation and created a centralized school
system under the Mayor.
But this new arrangement did not last. By Chapter 112 of
the Laws of 1873 the seven school districts set up by the law of
1864 were re-established, and provision was made for the appoint-
ment by the Mayor of a Board of Education consisting of twenty-
one Commissioners of Common Schools whose terms were for three
years. This Board was empowered to appoint five trustees for
each ward for five year terms and the Mayor was authorized to
appoint twenty-one inspectors, three from each district. This sys-
tem remained substantially unchanged until 1896. Its advan-
tages were said to be the removal of the schools from political
supervision, the provision of moderate local control by the trus-
tees, and the establishment of centralized supervision and final
control by the Board of Education without placing a danger-
ously great authority in the hands of the central Board.
The next important modification of the administrative machin-
ery of the school system was the abolition by Chapter 387 of the
Laws of 1896 of the ward trustees. These officers had persisted
since 1842 and had exercised many important powers. For many
years they were elected and, under the short-lived act of 1871,
they were appointed by the mayor. After 1873 they were
appointed by the Board of Education. The trustees were often
116 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
attacked by persons interested in the welfare of the schools. It
was claimed that some of them were illiterate; that they were
appointed for political purposes ; that they considered the appoint-
ment of teachers as legitimate patronage and that they showed
favoritism in promotion and in the selection of contractors. A
telling argument against the ward trustee system was that it was
absurd to use the ward as a basis of selection, as some wards had
very few schools while other wards had many. In 1888, in the
second ward, for example, there was only one school with but two
teachers, while in the twelfth ward there were 499 teachers.
The result of this agitation was the passage of a law by the
Legislature (Chapter 532, Laws of 1893) providing that the
Mayor should appoint a commission to report to the Legislature
a comprehensive revision of the laws affecting common schools
and public education in the City. This commission reported in
1894 and recommended abolishing the inspectors and depriving
the trustees of all powers except those of visiting schools and
reporting on their condition. Some of the trustees' powers were
given to the Board of Education and others were conferred on a
Board of Superintendents, to consist of the City Superintendent
and twenty Division Superintendents. This Board was given
large powers. Provision was also made for a Superintendent of
School Buildings and Supplies. The proposed law failed of pas-
sage at the 1894 session. It was reintroduced in 1895 with some
amendments, but failed again.
Chapter 387 of the Laws of 1896 abolished the trustees and
gave the Mayor power to appoint five inspectors in each district
whose duty was to visit schools. The statute also created a Board
of Superintendents, consisting of the City Superintendent and as
many Assistant Superintendents as the Board of Education might
deem necessary. The professional control of the schools was
lodged almost entirely in the new Board of Superintendents,
only a veto power being given to the Board of Education, whose
composition remained unchanged.
Brooklyn
In Brooklyn there was no " Public School Society." The
schools that were established and maintained there, after the
recognition by the State that education was a matter of public
concern, were administered by local authorities subject to the
general State laws.
REPORT OF JOIXT LEGISLATIVE COMMITTEE 117
As mentioned above, the State established the common school
fund in 1805. The first distribution was made in 1815, and in
1816 a local tax of $2,000 was levied and a common school
opened in the village of Brooklyn. Several other schools were
established prior to the incorporation of the City of Brooklyn in
1834 and the creation of a Board of Education in 1843. But
prior to 1843 all the schools were organized as special district
schools. It is true that in 1835 a law was passed (Chapter 129)
authorizing the Common Council to appoint three trustees of com-
mon schools in each district, and for the whole City three inspec-
tors and three commissioners, but the district organization was
still paramount.
The statute of 1843, creating a Board of Education, provided
that the members of the Common Council should be Commissioners
of Common Schools in and for the City, and that on the first Mon-
day in April, 1843, they should appoint two or more persons to
represent each of the school districts as members of the Board of
Education. The full term of office was fixed at three years and
the Mayor and Deputy County Superintendent of Common Schools
were made members ex-officio. The new Board was organized
with only twenty-eight appointed members, as in two districts
the full number of appointments was not made. The Board was
authorized in 1848 to appoint a City Superintendent of Common
Schools, the office of County Superintendent having been abolished
by statute in 1847.
By Chapter 143 of the Laws of 1850 the Board of Education
was made to consist of thirty-three members appointed by the
Common Council. The law provided that at least one member
should reside in each district. The term of office continued to
be three years. The law of 1854 annexing the City of Williams-
burg and the town of Bushwick to Brooklyn required the Com-
mon Council to appoint additional members of the Board of
Education for the new part of the City, and that body fixed the
membership at forty-five, of whom thirteen were to be residents
of the new territory. This number remained unchanged through-
out the rest of the Board's existence. In -1862 the Mayor was
given authority to nominate members of the Board of Education,
subject to confirmation by the Common Council.
In 1873 the charter was amended by providing that there should
be a Department of Public Instruction in Brooklyn under the con-
trol of the Board of Education ; that the City Superintendent of
118 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
Schools should be called the Superintendent of Public Instruc-
tion; that his term should be increased from one to three years
and that the Board of Education might appoint two Associate
Superintendents for three-year terms.
The amended charter which was passed May 25, 1880, pro-
vided that any vacancy in the Board of Education occurring dur-
ing the remainder of 1880 should be filled by the Mayor and
Comptroller (an act passed June 16, 1880, provided that in case
the Mayor and Comptroller failed to agree, the Auditor of the
City should become one of the appointing powers), and any
vacancy during 1881 should be filled by the Mayor alone. After
January 1, 1882, the sole power of appointment was with the
Mayor. Some confusion resulted in 1886 from the fact that the
amended charter fixed two-year terms for the heads of all city
departments without specifically mentioning the Board of Educa-
tion whose members had been serving three-year terms. In 1882
Mayor Low acted on the assumption that the Legislature had not
intended to change the term of office of Board members and made
regular three-year appointments. His successor, in 1886, took
the other view, declared vacancies and made appointments on the
two-year theory and doubt was cast on the legality of some of the
Board's acts. In 1887 the Legislature settled the matter by spe-
cifically extending the terms of the 1885 and 1886 appointees
and establishing the three-year term.
One unique feature of the Brooklyn public school system can-
not be left untouched upon. The by-laws of the Board of Educa-
tion of 1843 provided for district committees consisting cf the
Board members for each district. The schools of the district were
especially committed to these committees. This scheme lasted but
a short time, being followed by the local school committee, pro-
vided for by an amendment to the by-laws made soon after the
reorganization necessitated by the statute of 1850. These local
school committees consisted of three members for each school . In
the course of time these committees acquired large powers in the
appointment and promotion of teachers, in the making of repairs,
etc., until they were practically supreme in their respective schools.
This system was continued until the abclition of the Brooklyn
school board in 1902 and was even then carried over as Section
1103 of the first Greater "New York charter. The abuses of the
local committee system, particularly with respect to the appoint-
ment and promotion of teachers, were repeatedly the subject of
criticism.
REPOBT OF JOINT LEGISLATIVE COMMITTEE 119
Queens and Richmond.
The Borough of Queens is composed of several formerly inde-
pendent communities, such as JTewtown, Flushing and Jamaica.
The early history of education is the history of these separate
towns. The towns became school districts under the general State
law, the subdivision in Newtown taking place in 1814, and schools
were established from time to time. In 1870 a portion of New-
town was incorporated as Long Island City and the schools were
placed under the city government in charge of a Board of Educa-
tion of five members appointed by the Mayor. The village of
Flushing was incorporated in 1837. In 1848 it was provided with
a Board of Education of five members elected by the people.
In neither Queens nor Richmond, however, was there any
central organization in charge of the public schools. There were
numerous school districts and district officers, but not until the
incorporation of these two boroughs into the Greater City was
there anything that resembled centralized local school authority.
FOURTH REPORT
REPORT ON THE FINANCES OF THE CITY OF
NEW YORK
March, 1922
[121]
REPORT OF THE FINANCES OF THE CITY OF NEW
YORK, MARCH, 1922
To the Legislature and to the Charter Revision Commission:
The city lias run in debt approximately a hundred thousand
dollars a day since the greater city was incorporated. The funded
debt has fluctuated around the constitutional debt limit for ten
years. The tax rate has risen until it has reached, if not passed,
the constitutional tax limit. All other means of raising funds
to meet the ever rising tide of expenditures having been exhausted,
resort has been had to various devices, including doubtful in-
terpretations of constitutional limitations not contemplated at
their enactment, to statutory relief unsound in principle if not
unconstitutional like the general fund bond legislation, to increas-
ing and making permanent the floating debt which in the eye
of the law was intended to be small and temporary, and to the
use for current expenses of the income of public utilities allocated
in law and equitably applicable to the payment of the principal
and interest of bonded indebtedness incurred in the construction
of such utilities. These devices proving inadequate, the power
of assessment has been resorted to by the city administration,
which controls the department of taxes and assessments, until the
assessment has reached approximately 94 per cent of the actual
value, a rate much higher than the rest of the State. Like the
other devices pursued, this is nearly exhausted.
The net debt of the city as of December 31, 1921, was $1,224,-
475,347.51, of which $1^110,795,697.51 was funded and $113,-
679.050 floating debt represented by revenue bonds, special
revenue bonds and tax notes. The total net debt as of Decem-
ber 31, 1911, was $809,353,129.29, of which $756,711,343.05
was funded and $52,641,786.24 floating debt. The present debt
amounts to $217.64 per capita of the population. Exhibit "A,"
hereto attached, is a statement of the net funded debt since 1898.
The budget for 1921 was $345,530,039.77 and for 1911,
$173.967,835.16.
The budget for 1921 is made up of:
Cost of administration $217,960,329 20
Debt service 105,528,527 30
State taxes 22,041,183 27
[123]
124 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
The budget for 1911 was made up of:
Cost of administration $123,306,013 IT
Debt service 50,661,821 99
State taxes . None.
Tables showing the budgets, cost of administration, debt service,
State taxes and tax levies since 1898 are hereto attached marked
respectively Exhibits " B " and " C."
The difference between budget and levy for the same year arises
from the annual revenue from income paying properties like
the docks, ferries, water system, and taxes received from the
State, constituting the general fund. These receipts amounted
to $63,216,718.87 in 1921, and to $32,154,342.95 in 1911.
The assessment for real property in 1921 was $9,972,985,104,
personal $213,422,175, a total of $10,186,207,279. The assess-
ment for real property in 1911 was $7,858,840,164, personal
$357,923,123, a total of $8,216,763,287. While the cost of
government in this period has increased 81 per cent, the assess-
ment has increased only 24 per cent. A table showing the assess-
ments since 1898 is hereto attached, marked Exhibit U D."
The real estate tax rate for 1921 (Manhattan) was 2.77 and
for 1911, 1.72248, for Brooklyn, 1921, 2.80, and 1911, 1.75502.
For other years see World Almanac, 1922, page 557.
A table showing the per capita cost of government during suc-
cessive city administrations is hereto annexed and marked
Exhibit "E."
ABUSES IN FINANCIAL MANAGEMENT
Floating or Short Term- Debt. The average monthly balances
for the first half of the year 1921 shows the short term or floating
debt of the city as follows :
Kevenue bonds $103,549,833 33
Special revenue bonds 27,150.066 67
Tax notes 4,628,902 53
Corporate stock notes 109,584,442 73
$244,913,245 26
After deducting from this debt such of these securities as are
held in the sinking funds, there was an outstanding average
REPORT OF JOINT LEGISLATIVE COMMITTEE 125
balance of $201,191,900. Carrying this debt as a floating debt
is the source of great loss to the city.
Revenue bonds are issued in anticipation of the payment of
taxes during the year in which they are issued, and to be paid out
of such taxes. -Special revenue bonds are issued in anticipation
of an appropriation in the budget of the year following their
issue. Tax notes are issued to pay for public improvements to
be redeemed by taxes in the tax levy or levies of the year or years
next following the adoption of the budget or budgets in which
the expenditure is authorized. Corporate stock notes are issued
in anticipation of the sale of bonds, with the proceeds of which
they are to be paid, and are part of the funded debt.
(a) Revenue Bonds
The taxes in each calendar year are allocated to the year in
which they are levied. Such taxes are payable in the months of
May and November. The city borrows money for its expenses
from January first until taxes are paid in May by issuing
revenue bonds, payable out of the year's taxes. As the city re-
quires more each year for expenses than taxes levied, and there
are delinquent taxes not paid during the year in which they are
levied, payment of the bonds is delayed. They are in fact,
though not in form, renewed from time to time to carry back
taxes. The total arrears of taxes for the year 1921 was $56,854,-
113.14, and the whole amount of back taxes as of December 31,
1921, was $113,142,538.63. A statement of back taxes is hereto
attached, marked Exhibit " F."
The revenue bonds outstanding December 31, 1921, amounted
to $78,077,000. These were increased by new issues commencing
January 1st to meet the cost of administration until taxes are
paid in May. A statement of revenue bonds outstanding to
June, 1921, will be found in Exhibit "G," hereto attached.
(&) Special Revenue Bonds
In 1909 the Constitution was amended to permit the city of
New York to issue "bonds to be redeemed out of the tax levy
for the year next succeeding the year of their issue, provided that
the amount of such bonds which may be issued in any one year
in excess of the limitations herein contained shall not exceed one-
tenth of one per centum of the assessed valuation." It was un-
doubtedly anticipated at the time this provision was adopted that
126 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
the limitation of one-tenth of one per centum would be an abso-
lute limitation, but an examination of the context makes it doubt-
ful whether this limitation takes effect before the city reaches
or passes the debt limit. Special revenue bonds have been issued
in much larger amounts than one-tenth of one per ecnt, and the
practice has been sanctioned by legislative enactment. The
amount outstanding December 31, 1921, was $30,602,650, or more
than three times the amount named in the constitution. A state-
ment of such bonds outstanding since 1917 is contained in
Exhibit "G."
'Special revenue bonds are intended to meet contingencies not
anticipated when the budget is made up, but have been issued for
any and everything as a means of increasing revenue for the cur-
rent year, to be paid out of taxes of the following year. In 1920
the city having all but reached the tax limit, authorized special
revenue bonds, to the amount of $37,735,181.35, to meet expenses.
A statement of such authorizations is contained in Exhibit " H,"
hereto attached. The multiplicity of the authorizations forbids
a full statement in detail, but as illustrative of the multitude of
abuses under this provision, the following items are given from
these authorizations: "A tablet to the donor of Hero Park
$450." " Coal for municipal ferries, $244,472.50." " Premiums
on bonds of municipal officers, $12,560.98."
(c) Tax Notes
Tax notes now constitute a minor item of the floating debt.
Five millions are outstanding.
The volume of business transacted by the city in carrying
$135,000,000 of revenue bonds, special revenue bonds and tax
notes is by no means represented by the amount outstanding at any
date. These securities, like the corporate stock notes, exceeding in
amount one hundred million dollars, are issued and reissued at
short periods, after the fashion of commercial paper. The total
issue for 1921, including renewals or new issues to take up old
issues, are for:
Revenue bonds $369,000.083
Special revenue bonds 30,602.650
Tax notes . 5,000,000
$404,603.633
REPORT OF JOINT LEGISLATIVE COMMITTEE 127
The issue and reissue of corporate stock notes amounted to
$230,185,500.
Such a course of municipal business is carried on at great cost,
owing to the high rate of interest on short term paper and the
expense incident to so many transactions. The city is always
an applicant at the banks for millions of dollars on short loans.
As the debt is never redeemed, but met by the issue of new paper,
" temporary " is a misnomer. It is as " permanent " as any part
of the debt, but not a limitation to incurring further debt.
While the corporate stock notes are less subject to criticism
because issued as a part of the funded debt with a view to con-
verting them into bonds, they swell the floating debt and add to
its perils. The legislative committee of 1915, investigating the
finances of the City of New York, reported (1916) in relation to
this feature of its finances:
" Great embarrassment and loss in the City's finances have
arisen from the custom of keeping a large amount of short
time commercial paper on the market. In August, 1914,
the City had outstanding of such paper $25,000,000 in cor-
porate stock notes, issued in anticipation of bond issues, and
$73,000,000 of short time paper chargeable to current
revenues issued in anticipation of taxes. Of this paper
$77,000,000 was held in Europe. The crisis resulting
from the war compelled the City to borrow of the New York
banks $100,000,000 to meet this paper and current expenses
and to charge off a loss of more than $4,000,000 in expenses,
commissions and interest. The City was caught in the same
way in 1907 and the City administration in each case
regarded itself as fortunate in escaping a worse predicament
from a default on the City's commercial paper.
" The issuing of short-term paper in anticipation of taxes
is unavoidable under the present system of collecting taxes
for each calendar (fiscal) year in May and November. The
City always spends borrowed money for its current expenses.
Such issues could be avoided if taxes were collected in Jan-
uary and July. The Committee favors making this change.
To avoid the shock that would otherwise be felt by real estate,
it should be provided that taxpayers may in 1917 have until
April 30, instead of May 31, in which to pay taxes, and a
sliding scale adopted for three years, so that January 31
128 INVESTIGATION OF AFFAIRS OF NEW YOEK CITY
and July 31 will be the last days for the payment of taxes
in 1920.
'' The annual interest charge for these loans has averaged
three and a half million dollars. The total amount paid in
the last ten years is $o(j,470,837, or substantially $5,000,000
more than the City has paid during the same period in direct
State taxes. To this amount, lost to the City through a
system of discounting substantially all of the taxes before
they reach the City treasury, must be added the $4,000,000
lost on the hundred million loan in 1914, and upwards of
$1,000,000 lost in 1907."
The conditions condemned in this passage of the report of 1916
without a single dissent, involving an annual loss of three and a
half million dollars have continued until the loss is now five and
a half million dollars.
The city comptroller testified that the city is thrown into the
short term money market for $142,000,000 twice a year by reason
of the failure to advance the tax date, and that it is safe to take
as a round figure $150,000,000 for short-term loans on this
account.
A bill to advance the tax dates from May and November to
January and July was passed by the Legislature in 1916, but
vetoed by the mayor because of a technical defect, with a state-
ment of approval of the principle of the bill, and in expectation
that it would become a law in 1917. War conditions prevented
the enactment of the law, which should not now be further
deferred. The comptroller sought this legislative relief in 1921,
and testified that he informed the Legislature, " that the respon-
sibility for a financial crisis would be upon them if they did not
pass the tax date bill, because the failure to pass that bill results
in outstanding obligations at a sum far in excess of what the
money market is in condition to stand in normal times."
Sinking Funds. There are eight sinking funds, of which five
were inherited from municipalities incorporated in the present
city, and relate only to indebtedness which they were created to
protect. These sinking funds are as follows:
Sinking fund for the payment of interest on the (old) city debt.
Sinking fund for the redemption of the (old) city debt No. 1.
Sinking fund of the City of Brooklyn.
Water sinking fund of the City of Brooklyn.
REPORT OF JOINT LEGISLATIVE COMMITTEE 129
Sinking fund of Long Island City for the redemption of fire
Jbonds.
Sinking funds have been established and maintained by the
present city as follows :
Sinking fund of the City of New York.
Rapid Transit sinking fund of the City of .New York.
Water sinking fund of the City of New York.
The total amount reported as held by these funds on Decem-
ber 31, 1921, was $603,590,922. The transactions of the funds,
which are substantially duplicated each year, will be referred to
the year preceding this inquiry, 1920. Substantially all of the
holdings of the sinking funds consist of obligations of the city.
As principal and interest fall due, it is paid into the funds and
they are increased from year to year. They are also increased
from year to year by the amount paid in for amortization. Assets
of the sinking funds are always deducted in .statements of the
city debt.
The sinking funds of the old municipalities stand in marked
contrast to the sinking funds of the present city. They were
secured by pledging revenues to debts incurred. These revenues
have not only proved adequate, but have produced large surpluses
which inure to the benefit of the present city.
The sinking fund for the payment of the interest on the (old)
city debt is chargeable $476,372.08 annually for interest on out-
standing bonds while its cash receipts from interest on its invest-
ments, Croton water rents, ferries and other pledged revenues,
is approximately $14,000,000. The sinking fund for the pay-
ment of (old) city debt Xo. 1, charged with the payment of
$35,832,891.79 in bonds falling due in 1929, receives from its
securities now amounting to $35,000,000 (besides $376,500,000
general fund bonds), and from dock rents and other pledged
revenues more than nine million dollars annually.
These huge surpluses have not been overlooked by the city
government.
General Fund Bonds. In 1903, section 222 of the charter
was enacted, under which the sinking fund commission deter-
mines the amount of the surplus in each of these funds, and
directs its transfer to the city treasurer for expenses of adminis-
tration, and in reduction of the tax rate. This section provides
for the issue of general fund bonds 'by the city, to be deposited in
5
130 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
place of the surplus removed, and for the cancellation of such
bonds as soon as the old city debt is paid. Such bonds are in
fact no more than receipts by the city for the money withdrawn.
Three hundred seventy-six million and five hundred thousand
dollars of the general fund bonds have been issued since 1903.
They are reported as a part of the sinking fund holdings, but
as a matter of bookkeeping only. Deducting these bonds from
the whole amount of such holdings, the sinking fund contains only
$227,090,922, instead of $603,590,922, the apparent total. The
funds actually transferred to the city treasurer under this pro-
vision to date amount to $296,661,385.81 and the funds so trans-
ferred for each year are as follows :
1903 $8,462,583 33
1904 9,216,437 50
1905 10,423,625 01
1906 10,886,958 33
1907 12,297,087 50
1908 ' 12,704,416 66
1909 14,943,083 33
1910 14,367,812 50
1911 14,359,916 66
1912 13,885,875 00
1913 . 17,811,629 56
1914 18,744,589 04
1915 17,563,445 21
1916 V. 17,306,232 88
1917 18,004,678 08
1918 19,321,109 59
1919 20,085,308 22
1920 23,000,574 96
1921 23,276,022 45
Total $296,661,385 81
The surplus increase each year with the increase in receipts
from pledged revenues, among which are water, docks and ferries.
The discrepancy between the sums annually transferred to the
city treasury and the annual issue of general fund bonds arises
from the issue of bonds to cover interest on the general fund bonds
REPORT OF JOINT LEGISLATIVE COMMITTEE 131
previously issued, and is likewise only a matter of bookkeeping.
The comptroller's testimony on these transactions follows:
" The surplus moneys in the Sinking Fund ^To. 1 of the
old City of Xew York have been taken out under the act of
the legislature passed in that year and held and applied to
the reduction of taxation, and altogether, up to the present
time, more than $350,000,000 of moneys pledged to the pay-
ment of the City's debt has in that way been applied to
reduce current taxes, and general fund bonds substituted,
and that is merely a memorandum showing the total amount
that the sinking funds have been depleted by applying their
cash to current expenses.
" I may add that that money could be better applied in
reducing the City's debt.
" I think it is beating the devil around the bush, that is
what I think about it.
" The act of 1903, although no one from 1903 to 1921
has challenged its constitutionality, is an utterly indefensible
bit of legislation.
" My present judgment is that it is entirely irregular
and unsound to take the revenue received from self-sustain-
ing properties for which debt has been incurred and apply
those revenues for any other purposes than to the payment
of the interest and the amortization of that debt, except
where there may be a surplus so great that you can never
have any possible use for it, and then I think you could very
well apply it to the interest and amortization of some other
debt that is not self-sustaining.
" There is a gross diversion of them from their proper
application. Revenues from docks, or the revenues from
water, or. for that matter, from any other self-sustaining
enterprise, rapid transit, so far as it is self-sustaining, should
be applied to the payment of interest and to provide for the
redemption of the bonds that have been issued to provide
those several public improvements. They should not be
diverted to reduce taxation and then throw this other burden
of redemption and interest into the budget over and above
the tax limit."
The practice thus established of diverting sinking fund assets,
in their nature applicable to specific debts, to ordinary city
expenses has proved so convenient to successive administrations
132 INVESTIGATION OF AFFAIRS OF NEW YOEK CITY
that they have turned into these sinking funds receipts from
docks, ferries and water, which were not pledged to the funds,
thereby facilitating and covering the misapplication.
'Substantially all cash accumulating in the sinking funds is
absorbed annually by purchasing new issues of city securities.
Thirty million dollars was so absorbed in 1920.
The results of sinking fund management may be summarized
as follows:
(a) The sinking funds furnish no security for the debt held
by the public. That debt must be paid by taxation. The sinking
fund securities could be disposed of, if a market could be found,
and the proceeds applied, but that has been discounted by treating
such securities as cancelled in computing the city debt, and when
disposed of to the public, such securities would have to be met
by taxation.
(b) Taxes have been increased by taking funds which should
be applied to keep down debt service, for expenses of administra-
tion, this in effect increasing to that extent the 2 per cent con-
stitutional tax limitation and by adding instead of deducting the
amount of such funds to debt service which has no constitutional
limitation. In this way $9,471,722.74 of Croton water rents,
$1,633,677.56 from the ferries and $6,974,093.31 from dock
leases, besides lesser revenues derived from permanent utilities
diverted from application to the funded debt, were applied to
the cost of administration in 1920. In the same year there was
included in the budget for debt service for the water supply,
$8,619,289.17; for docks and municipal ferries, $3,940,402,40.
The issue of corporate stock and bonds for water supply in the
same year amounted to $3,120,100. The practice is indefensible
and the reverse of the practice in relation to the old subways,
where the receipts are directly applicable to the payment of
amortization and interest ; to the Brooklyn water system, where
the receipts go to pay the debt ; and to bridges, where the receipts
are applied to the expenditures on bridges.
The taxes levied having passed the constitutional limit in 1921,
such transfers operated to further increase prohibited taxes in
the amounts so transferred, and in the same way to keep barely
within the limit in 19'20. The practice is condemned by the
present comptroller, who testified that in practical effect it
expanded the tax limit.
Nothing could be more complicated and confusing than the
sinking fund system established under the title of the sinking
REPORT OF JOINT LEGISLATIVE COMMITTEE 133
fund of the city transit sinking fund and the water sinking fund
and provides for each funded debt allocated on paper to its own
amortization. While the funds are indiscriminately mixed, sink-
ing funds, if maintained at all, should be separately maintained.
Such was manifestly the purpose of the constitutional amend-
ment of 1909, as applied to the $69,000,000 of dock bonds
exempted under its provisions, but no separate sinking fund has
ever been provided. If the present system of sinking funds had
been organized with a view to concealing their purpose and effect,
the inquiring citizen could not have been rendered more helpless.
A sinking fund is defined as " a fund created by gradual
accumulations for sinking or paying a debt, or providing against
contingencies." These sinking funds answer neither purpose
of the definition. On the contrary, they promote the increase
of debt and extravagance, involve a multitude of costly trans-
actions without profit, stimulate a false sense of security and
confuse the public as to the city's real financial condition. This
is in marked contrast to the operation of the sinking funds of the
municipalities out of which the city was formed. These were
adequately secured, have safely provided for the bonded debts
charged against them, and have furnished huge surpluses for
manipulation by succeeding administrations of the greater city
in violation of every sound principle of finance. The sinking
fund commission, as the responsible director of these funds, is
worse than useless and should be abolished.
A statement showing the transactions of the sinking funds,
with their interlocking and interweaving hodge podge of revenues,
internal investments, contributions, redemptions, interest pay-
ments and transfers, is hereto annexed and marked Exhibit " I."
Refunding City Debt. The funded debt of the city has been
issued without system and matures so irregularly as to invite
future peril to the city's credit. Of the $914,441,*412.68 falling
due from 1922 to 1967, only $22,000,000 falls due before 19-28.
None falls due in the years "l931, 1938, 1939, 1943, 1944, 1945,
1946, 1947. Seven hundred and eighty-one million dollars falls
due after 1951, and $109,000,000 in the year 1960.
This unscientific arrangement is expensive as it is inexpedient,
and the investigations of the Committee indicate that by making
provision for the payment of the debt in equal annual install-
ments for amortization and interest, a saving of approximately
$178,000,000 can be made by 1967, the last date of maturity.
The payments as they fall due with compound interest have been
134: INVESTIGATION OF AFFAIRS OF NEW YORK CITY
computed and compared with the equal annual payments on the
basis of 5 per cent as an average return on the funds held for
application to future debt. The plan for redemption is set forth
in the report of the Committee's actuaries, Messrs. Ferine &
Nichols, marked Exhibit " J," hereto attached. If criticism foe
made that assurance is lacking of the annual return of 5 per
cent on such funds, on the ground that it may be too high, nothing
more serious would in such event occur than a partial loss of the
profit indicated. This would not be important for a number of
years, as the interest and bonds falling due will substantially
absorb the payments. As the funded debt is issued at a low rate
of interest, such funds would be reasonably sure to draw a higher
rate of interest than the debt they are kept to redeem. If the
plan be adopted, a sinking fund should be established and invested
in other obligations than of the City of New York. The State has
always found such a course wise and profitable.
The payments by the city under this plan would be less than
the amounts now currently paid for amortization and interest, and
would continue to be less until 1930. No embarrassment can
arise from the obligation to maintain existing sinking funds for
parts of the funded debt. It can be arranged by consolidation or
transfer, or if necessary, payments to existing sinking funds can
be treated as partial payments to the new sinking fund until the
time arrives when the old funds go out of existence.
Future debts can be provided for in the same way by providing
for periodical funding in the same manner with like security.
Loss FROM MUNICIPAL OWNERSHIP
The city suffers great loss by reason of its investment in prop-
erty which falls under the classification of municipal ownership.
A. Docks. As appears by this Committee's report on the
dock department, the city owns dock property worth $300, 000, 000.
This property serves State and National purposes even more than
municipal, and could, as appears from payments for dock service
by lessees, readily give a net return of 6 per cent, or $18,000,000.
But the financial statement of the docks is:
Total receipts $7,094,240
Cost of administration 1 ,202, 427
Two per cent depreciation on pstim^ted value of dock
construction Jan. 1, 1920 ($70,000,000) 1 ,400,000
Loss of taxes on dock property not used bv the citv 4 , 775 , 1 50
7,377,577
Deficiency $283,337
REPORT OF JOINT LEGISLATIVE COMMITTEE 135
The docks occupied by the city for municipal purposes are
assessed at $20.000,000, and the value of the use may be estimated
as 7 per cent over and above taxes, or $1,400,000, giving an
apparent net return on the whole investment of approximately
$1,100,000, or approximately $17,000,000 less than its fair rental
value. The city is now engaged in completing docks on Staten
Island costing $25,000,000, which have already been rented at
an annual loss of $600,000.
The city had outstanding in 1920 bonds issued for docks and
ferries amounting to $101,372,036 (greater now) on which it
paid $4,353,46-1 in interest, or $3,153,464 more than its apparent
complete net return.
B. Subivays. The cost to the city of the original subways,
that is, the Bronx-Manhattan line and the Brooklyn line, was
$51,013,724, the amortization and interest charges on which are
paid under the terms of the contracts under which they were built.
The amount expended or placed under contract for the con-
struction of the dual subways, that is, those built under Contract 3
(Interborough) and Contract 4 (Brooklyn Rapid Transit),
appeared on March 1, 1921, to be $2'26,220,432. In addition
to these sums, the city's contractual obligation to complete lines
now building, or still to be built under the dual contracts, will
require an additional expenditure estimated at $40,000,000, for
which provision has not yet been made. The city paid in interest
on this indebtedness for 1920 $7,250,000, for which it received
no return.
It may be a counsel of perfection to suggest that the city's
property interest in the subways vastly exceeds the amount of the
investment, and should give a handsome revenue to the city
treasury. It will be a step in the right direction when the
receipt^ equal the disbursements.
C. Ferries. The ferries likewise are unprofitable. The state-
ment for 1920 is as follows:
Total
receipts Expenditures
Staten Island division $1 ,446,490 87 $2,011 ,514 04
Brooklyn division 192,252 99 594,485 43
Astoria division 27,589 90 205,483 69
$1,666,333 76 $2,811,483 16
Over receipts 1,145,149 40
of disbursements over receipts 1 ,045, 149 40
Excess
To this must be added interest and depreciation on
$8,668,345.24, expended for wharf property and construction of
136 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
terminals since 1903, and interest and depreciation on terminal
property of the city acquired before 1903, amounting at a con-
servative estimate to $600,0000 annually.
The city has expended since 1903 $4,357,270.29 for boats.
Their present inventory value or rate of depreciation does not
appear, but it must be a very considerable sum. Two million
dollars would be a conservative estimate of the annual loss from
operation of the ferries.
The annual loss on docks, subways and ferries foots up over
$26,000,000. It may be noted in this connection that there is
no profit and loss account on city owned property. Such state-
ments would contribute to economy in management and expendi-
ture. While the properties were acquired for the accommoda-
tion of the public, they were also acquired for the expectation
that they would be self-sustaining', and a source of revenue rather
than a drag on the city treasury and a burden to the taxpayer.
The city treasury gets none of the receipts from the docks or
ferries which are paid into the sinking funds of the old City of
New York, and the city borrows such receipts on general fund
bonds. The subway receipts are absorbed in providing for amor-
tization and interest. Nothing could be more unsound financially
or absurd than the exemption of $51,000,000 of subway bonds
and $69,000,000 of dock bonds to enable the city to incur
further debt, when the subways, as a whole, and the docks and
ferries are run at a fearful loss. The constitutional amendment
of 1909 manifestly contemplated that these properties should be
self-supporting, but carelessness in drafting and skill in manipu-
lating its provisions have enabled the city to avoid to its own
detriment compliance with this requirement.
THE ABANDONMENT OF THE " PAY-AS- You-Go " POLICY
Among the abuses in financial management in the city, none
is of greater importance than the virtual abandonment of the
" pay-as-you-go " policy. When the city, to avoid defaulting on
its securities, found it necessary to borrow $100,000,000 in 1914,
the syndicate which financed the loan imposed as a condition of its
negotiation the adoption of the pay-as-you-go policy, and the board
of estimate, on the llth day of September, 1914, adopted the
following resolution :
" Resolved, That the Board of Estimate and Apportion-
ment hereby declares that it will pursue the following plan
in financing public improvements :
REPORT OF JOINT LEGISLATIVE COMMITTEE 137
"(1) The cost of all improvements of the revenue-produc-
ing class, such as rapid transit, docks, railway aiiu water
terminals and water supply, shall be defrayed oy the issue
of nity-year corporate stock as neretoiore;
"('2) The cost of all permanent improvements, other than
those of the revenue-producing class, hereafter authorized by
this board, shall be financed as follows :
"(a) Those authorized subsequent to the passage of this
resolution and during the year 1915 shall be paid ior, three-
quarters by the issue of fifteen year corporate stock. The
corporate stock so issued shall mature either in not more
than fifteen years, amortized as provided by law, or in equal
annual installments, during a period of not more than fifteen
years. The remaining one-quarter of the cost of such
improvements shall be paid through the medium of a one-
year bond payable from the next annual tax budget.
"(b) Those authorized in the year 1916 shall be paid for,
one-half by the issue of corporate stock maturing as afore-
said. The remaining one-half of the cost of such improve-
ments shall be paid through the medium of a one-year bond
payable from the next annual tax budget.
u (c) Those authorized in the year 1917 shall be paid for,
one-quarter by the issue of corporate stock as aforesaid. The
remaining three-quarters of the cost of such improvements
shall be paid through the medium of a one-year bond payable
from the next annual tax budget.
a (d) The foregoing statements of policy contemplate the
financing of improvements authorized during the year 1918
and subsequent years through the inclusion of the entire
cost thereof in the annual budget of the City, excepting the
revenue-producing improvements hereinbefore mentioned.
"(3) In so far as corporate stock notes issued by the City
of Xew York as a part of the proposed plan of $100,000,000
shall be retired by issues of corporate stock, the corporate
stock so issued shall mature as provided in clauses (a), (b)
and (c) of paragraph 2 of these resolutions.
"(4) The cost of public works already authorized, whether
under contract or not, but in respect of which new bonds
are to be issued, is to be financed in the same manner as
above provided, with the exception of the cost of revenue-
producing- improvements hereinbefore mentioned.
138 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
" Nothing herein contained shall be deemed to affect their
corporate stock or assessment bonds issued to replenish the
street improvement fund or the fund for street and park
openings."
The joint legislative committee in 1916 recommended the enact-
ment of a statute embodying the provisions of this resolution.
By section 2 of chapter 615 of the Laws of 1916 it was accord-
ingly enacted:
" The City of New York shall not, except as hereinafter
provided, expend any part of the proceeds of sales of cor-
porate stock or serial bonds for other than revenue-producing
improvements."
By the terms of the act of 1916 this policy first took full effect
in the year 1918. As the pressure of war finances was at its
height in that year, the city applied for and secured by chapter 658
of the Laws of 1918, the suspension of the pay-as-you-go policy
to permit the issue of " fifteen million dollars for each calendar
year of the present war, dating from January 1, 1918, and for
one year after the termination of the war * * *. For the
purposes of this act, the termination of the war shall be as fixed
by proclamation of the President of the United States."
Owing to the failure to proclaim peace until the year 1921, the
city secured by this act the right to issue $15,000,000 of long-
term bonds for a period of five years, and has taken full advantage
of the act, issuing the full $75,000,000. While within the law,
it was not within the spirit of the law, and constitutes a serious
evasion of this sound principle of finance.
Notwithstanding the relief thus secured, the city again applied
for a modification of the policy, and by the enactment of chap-
ter 960 of the Laws of 1920, exempted from its provisions, long-
term bonds for the erection of school buildings, and the acquisition
of sites. The purpose of the act is by this means subverted,
and the city has in the brief period since 1916 issued approxi-
mately $100,000,000 of corporate stock or long-term bonds in
violation of the pledge of the city made in 1914.
TAX LIMIT EXCEEDED
The constitutional 2 per cent tax limit is fixed and determined
by the valuation of the real and personal estate of the city as
shown by the last assessment-rolls, and not as shown by the cur-
rent assessment-rolls. The city, therefore, in 1921 exceeded the
tax limit by $20,000,000.
REPORT OF JOINT LEGISLATIVE COMMITTEE 139
The last sentence in section 10 of article 8 of the Constitution
provides :
" The amount hereafter to be raised by tax for county or
city purposes, in any county containing a city of over one
hundred thousand inhabitants, or any such city of this state,
in addition to providing for the principal and interest of
existing debt, shall not in the aggregate exceed in any one
year two per centum of the assessed valuation of the real
and personal estate of such county or city, to be ascertained
as prescribed in this section in respect to county or city
debt."
Referring to the clause in the same section as to county or city
debt, it reads:
" No county or city, shall be allowed to become indebted
for any purpose or in any manner to an amount which includ-
ing existing indebtedness shall exceed ten per centum of the
assessed valuation of the real estate of such county or city,
subject to taxation as it appeared by the assessment rolls of
said county or city on the last assessment for state or county
taxes prior to the incurring of such indebtedness."
It is, therefore, clear that the assessment referred to in the
tax limit provision is the last assessment, and not the current
assessment.
The assessed valuation of the real and personal estate of the
city for 1920 was $8,922,627,892 and for 1921 $10,186,207,279.
The tax levy, exclusive of debt service and State tax, was barely
within the 2 per cent limitation of $203,724,145.58, if computed
on the assessment of 1921. It exceeded 2 per centum on the
assessment of 1)20 ($178,452,557.84) by approximately twenty
millions of dollars. Each tax levy prior to 1921 has been uni-
formly within 2 per cent of the tax levy of the preceding year.
The 1921 levy was a clear violation of the constitutional pro-
vision as hitherto understood throughout the State. Tax rolls
are not completed until they are extended, and the tax roll of the
city for 1921, the current tax roll on which this limitation was
sought to be made, was not completed until March 28, 19'21,
when the tax in excess of the limit was assessed. It was not
assessed upon the last assessment-roll as required, but upon the
current assessment-roll. The reasons for this conclusion were
presented to the Committee during the examination of the city
140 INVESTIGATION OF AFFAIKS OF NEW YORK CITY
officials in an opinion by its counsel, which is annexed to this
report as a part oi Exhibit " K."
The city has violated the spirit and purpose of the 2 per cent
tax limitation 'by using the receipts from income-paying utilities
for expenses and charging all interest on the bonded debt of such
utilities to debt service. The city received from Croton water rent,
through the general fund bonds statute in 1920, $9,471,722.74;
from docks, $6,974,093.31; from ferries, $1,633,677.56, or over
$18,000,000, and collected by taxes for debt service, interest on
the Croton water debt, $8,619,289.17, and interest on the bonded
debt of docks and ferries, $3,940,402.40. Under this practice,
the more the city is in debt for income-paying properties, the
greater will be its available funds for expenses in excess of the-
2 per cent tax limitation. To illustrate: If the city, having
reached the 2 per cent limit, purchases or contracts for a public
utility costing a hundred million dollars, for which bonds are
issued, with an annual amortization and interest charge of
$4,000,000, and a revenue of $3,000,000, amortization and the
interest charge of $4,000,000 go into the debt service, and the
$3,000,0*00 revenue goes into the city treasury for expenses in
excess of the 2 per cent tax rate. The comptroller testified,
" This acts in practical effect to expand the tax limit."
DEBT LIMIT EXCEEDED
Section 10, article 8, of the Constitution provides :
" No county or city whose present indebtedness exceeds
ten per centum of the assessed valuation of its real estate sub-
ject to taxation, shall be allowed to become indebted in any
further amount until such indebtedness shall be reduced
within such limit."
In the freqnent amendments to this section, relief has been
granted the City of New York by the following exceptions to
this rule:
First. Revenue bonds issued against taxes in the levy of the
year in which they are issued. Of these the amount outstanding
has averaged a hundred million dollars in recent years.
Second* Special revenue bonds issued against taxes to be
levied in the next .succeeding year. Of these about thirty million
dollars have been issued in each of the last two years.
Third. Bonds for water supply, of which $206,000,000 are
now outstanding.
Fourth. County bonds amounting to $6,600,000.
REPOKT OF JOINT LEGISLATIVE COMMITTEE 141
Fifth. Debts hereafter incurred for revenue purposes where
such revenue exceeds repairs, maintenance, interest and amortiza-
tion charges. This may be regarded as a dead letter, as the city
is a stranger to such investments.
Sixth. Any indebtedness heretofore (1909) incurred by the
City of New York " for any rapid transit or dock investment
may be so excluded proportionately to the extent to which the
current net revenue received by said city therefrom shall meet
the interest and amortization installments thereof, provided that
any increase in the debt incurring power of the City of New York
which shall result from the exclusion of debts heretofore incurred
shall be available only for the acquisition or construction of
properties to be used for rapid transit or dock purposes."
Attention is now directed to the sixth exception.
The margin of the city's debt incurring- power is reported by
the comptroller as follows :
January 1, 1918 $18,419,078 91
January 1, 1919 52,099,492 55
January 1, 1920 21,439,370 05
January 1, 1921 34,804,248 86
January 1, 1922 133,645,964 51
In reaching these results the comptroller in each of his state-
ments has treated as exempt from the debt limit $120,000,000
under this exception ($69,000,000 for docks and $51,000,000 for
subways), thus allowing to the city a debt incurring, power for
other purposes than docks and subways of $120,000,000. This
exemption is not justified by the Constitution. The bonds are
not excluded for general purposes ; the exclusion is for a specific
purpose only, viz., docks and rapid transit, and the debt incurring
power of the city is increased in this sum for no other purpose.
Except for such purpose, the excluded bonds, as well as the debt
subsequently incurred, must be treated as a part of the debt of
the city in fixing its debt limit. The city's debt incurring power
as of January 1, 1922, is, therefore, $13,645,964.51, and not
$133.645,964.51, and the city has incurred debt in excess of trie
constitutional limit in each of the preceding years referred to,
and for most of the time since the alleged exemption of the dock
and rapid transit bonds. The opinion of the counsel of the Com-
mittee presented to the Committee during* the examination of
the city officials on this point is contained in Exhibit " L," hereto
attached.
142 INVESTIGATION or AFFAIRS OF NEW YORK CITY
GENERAL CONSIDERATIONS ON THE TAX LIMIT AND DEBT LIMIT
As the tax limit and the debt limit are a source of annoyance
to those seeking other and greater appropriations, some advocate
their repeal, claiming that u the strength of sin is the law.' 7 They
would abolish the sin by repealing the law. But these principles
have their roots in economic law, the law of personal rights and
the law of self-preservation by the State. Without such restraints
taxable property would be confiscated, the financial soundness of
the city imperiled, and when the tax-bearing capacity is exhausted
the State would be deprived of its potential capacity to tax for
State purposes 63 per cent of its real estate.
Financial abuses in city management, and the failure to correct
or attempt to correct them, all indicate an indisposition to retrench
or economize. Remedies are not hard to find, they are at hand,
but not employed. Expenditures and employment, made on a
war basis, have not been reduced. The State, the Nation and
all private business have made heavy cuts in their budgets, but
the city not. City officials without exception denied before the
Committee the possibility of economies in any other way than
the fall in price of commodities, and the expenditures show an
unrestrained growth. This curiosity could not exist in any other
municipality in the State, or even in the city, with an informed
public opinion. The weight of taxes in the long run falls as
heavily upon the poor as upon the rich. It is easier for the tax-
payer to realize this when he pays his taxes than for the tenant
when he pays his rent or buys his groceries.
In searching for reasons for this apparently inexplicable con-
dition of the public mind, the Committee caused a census of the
taxpaying and nontaxpaying voters to be taken in nineteen elec-
tion districts, selected in the city at random. The returns show
8,477 nontaxpaying voters and 521 taxpaying voters. One dis-
trict returned 493 nontaxpaying voters and one taxpaying voter.
For census see Exhibit " M."
MANIFEST FINANCIAL REFORMS
Among the reforms which present conditions call for are the
following :
Docks $17,000,000
Subways (amortization and interest on bonds) . . . 7,250,000
Ferries 2,000,000
Actuarial payment of funded debt 4,000,000
REPORT OF JOINT LEGISLATIVE COMMITTEE 143
Retrenchment from 3 per cent to 10' per cent on
city's expenses of administration (3 per cent) . . 5,500,000
Saving by advancing the tax dates 5,500,000
Saving by bringing county government under the
jurisdiction of the city 2,500,000
Additional State appropriation for schools 15,000,000
$58,750,000
These reforms cannot be hoped for from the city government
as now organized. They cannot be achieved by law alone, but
they can be met by a reorganization of city government with the
aid of law. An indispensable condition is the constitution of a
board of finance, or some similar body, as recommended in the
Committee's first report. A redistribution of powers among exist-
ing officials and boards will be more of the same thing, and with-
out effect.
It is not claimed that these reforms can all be immediately
realized, but the plan can be immediately put in operation, great
progress made promptly, and the end reached within a reasonable
time.
While some small relief may come from stopping mandatory
legislation, it will amount only to the difference between the sums
required by law and the sums the city would expend for the same
purposes. The greatest injury to the city from this legislation
lies in its use as a screen to hide great and substantial faults of
city management.
STATE TAXES
The city cannot escape bearing its share of the burden of State
taxes. The legislative committee of 1915 found the indirect
taxes were equitably distributed over the whole State. The direct
State taxes are really negligible, amounting to $22,041,183.27
in 1921. The city received from State taxes in the same year
$44,499,014.62. The State is now paying the city for schools
nearly as much as the direct State tax of 1921. Inequalities,
if any, are not hard to correct, but they will not be reached by
outcries against so small a burden to maintain the State of which
the city is a part, when 63 per cent of the value of all real prop-
erty is in the city. The State tax, like mandatory legislation,
is a mote to distract attention from the beams. The city taxes
were in 1921, $284,146,634. The people of the city paid to the
Federal government $859,851,705.63, of which more than $634,-
144 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
000,000 was for income taxes. Not an unnecessary dollar of
State tax should be imposed, but the relative importance of the
interests provided for cannot be overlooked.
FINANCIAL REQUIREMENTS OF CITY
Besides the ordinary city expenses, the city requires vast sums
of money for new improvements. The Transit Board fixes the
amount required for subways at $500,000,000 in the next ten
years, of which $200,000,000 will be required within five years.
Docks, a marginal railway, markets, schools, tunnels and bridges
are all necessary to the welfare of the city. A billion dollars for
extraordinary expenses will not more than suffice in the next ten
years. Under the present management the city cannot meet
these expenditures from current revenues, or by incurring debt,
but if it will put its house in order and practice economies, com-
mon to States, municipalities and private business, it can make
satisfactory progress.
NECESSITY OF CONSTITUTIONAL AMENDMENT
The constitutional provisions affecting the city are found in.
section 10, article 8 of the Constitution. Since its adoption in
1894, it has been amended five times by the insertion of clauses
of exemption and exception principally to meet temporary
emergencies in city finances. The result is a hodge-podge. It is
involved. The new clauses, inserted without recasting the entire
section, frequently confuse the meaning of the whole. The sec-
tion now covers many unrelated matters, and instead of being a
constitutional guide, is a labyrinth of words and provisions in
which the reader is lost. It serves as often to foster violations
of sound finance as to prevent them. The section should be re-
drawn in several sections and re-enacted to meet the conditions
described in this report.
RECOMMENDATIONS FOR RELIEF
I. The Committee recommends changing the tax dates from
May first and November first to January first and July first,
under a system of gradual change to the prior month, and annex
a copy of the proposed bill for that purpose.
II. Restoration of the " Pay-as-you-go " policy, as enacted in
1916.
III. Abolition of the sinking funds at the earliest day prac-
ticable and of the sinking fund commission. Care of the funds
to be vested in the Comptroller.
REPORT OF JOINT LEGISLATIVE COMMITTEE 145
IV. Repeal of the general fund bond legislation, and the appli-
cation of all sinking lund receipts to the payment of interest and
reduction of the city debt, and specifically of the application of
funds received from the income-paying properties to the debts
created for the acquisition of such properties.
V. Placing public utilities on a self -support ing and inde-
pendent basis, with separate profit and loss accounts.
VI. Inauguration of an actuarial system of payments to pro-
vide for the existing debt, and the inauguration of a new serial
bond system on the same basis to provide for new debt.
VII. Amending section 10, article 8 of the Constitution in
accoi dance with the recommendations of this report.
VIII. Simplification of government through such constitu-
tional amendment and enactment of statutes in accordance with
the terms of this report.
The Committee refers to recommendations already made bear-
ing upon the finances of the city as follows :
(a) First Report. Recommending the establishment of a
finance board of nine members, to be elected 'by the city at large
for six years, three to be elected every other year.
(b) Second Report. Department of Docks, recommending a
new dock commission of three members, to be appointed by the
mayor, one from a list to be named by the maritime interests
of the city, one from a list to be named by the New York Chamber
of Commerce, and one at will, who shall be chairman of the com-
mission, with an eight year tenure of office.
(c) Third Report. Recommending the granting of complete
autonomy to a board of education appointed on nonpolitical lines.
Reference is had to these reports for a full statement of the
Committee's recommendations.
Respectfully submitted,
SCHUYLER M. MEYER, Chairman,
THEODORE DOUGLAS ROBINSON,
FREDERICK W. KAVANAUGH,
MAXWELL S. HARRIS,
SIMON L. ADLER,
SOL ULLMAN,
JOHN R. YALE,
THEODORE STITT,
WALTER W. WESTALL.
ELON R. BROWN,
Counsel.
146 INVESTIGATION OF AFFAIKS OF NEW YORK CITY
EXHIBIT "A"
Showing Growth of Net Funded Debt Less Sinking Fund Since
Consolidation
Year
1898 $250,510,551 64
1899 256,843,289 25
1900 277,691,434 97
1901 298,873,969 50
1902 311,760,974 30
1903 334,176,991 30
1904 400,945,164 75
1905 430,477,000 39
1906 474,653,205 12
1907 537,577,801 03
1908 589,045,654 07
1909 648,062,228 92
1910 689,363,508 53
1911 760,995,992 15
1912 827,910,800 94
1913 820,064,364 22
1914 892,172,621 88
1915 942,216,168 29
1916 973,734,136 52
1917 1,007,495,164 14
1918 1,020,481,661 25
1919 1,025,583,349 79
1920 1,027,811,089 70
1921 1,031,201,252 27
EXHIBIT "B"
Showing Cost of Administration, Debt Service, Tax Deficiencies,
State Taxes and Total Budget Since 1910
Cost of Tax
YEAR administration State taxes Debt service deficiencies Grand total
1910 $112,684,57465 $46,443,695 72 $4,000,000 00 $163,128,270 37
1911 113,306,01317 50,661,8219910,000,00000 173,967,83516
1912 122,247,01595 $4,301,34565 51,254,25817 3,287,36674 181,090,25631
1913 127,487,02786 7,947,03196 54,977,38134 2,300,00000 192,711,44116
1914 133,307,73054 4,576,30343 52,611,51765 2.500,00000 192,995.55162
1915 133,045,31304 59,832,38104 6,112,09214 198,989,78652
1916 131,767,94570 13,975,02173 63,213,21011 4,000,00000 212,956,17754
1917 136,369,56787 69,744,56895 5,000,00000 211,114,13682
1918 150,969,54280 8,463,75638 75,590,46002 3,100,00000 238,123,75920
1919 159,735,86717 8.522,62961 77,931,93810 1,835,00000 248,025,43488
1920 188.663,79010 8,539,15637 74,811,53866 1,675,00000 273,68948513
1921 216,280,33020 22,041,18327 105,528,52730 1,680,00000 345,530,03977
REPOKT OF JOINT LEGISLATIVE COMMITTEE
147
EXHIBIT "C"
Showing Budget Total, General Fund Revenues Deducted and
Amount of Tax Levy
General
Total
Fund
Year
Budget
Revenue
Tax levy
1899
$95,209,259 84
$9,026,191 26
$86,183,768 58
1900
92,397,446 46
9,855,272 71
82,542,173 75
1901
99,826,582 67
11,787,949 88
88,038,632 79
1902
100,349,619 30
11,396,711 67
88,952,907 63
1903
98,898,968 92
21,266,304 98
77,632,663 94
1904
108,592,693 48
22,521,665 21
86,071,028 27
1905
111,964,648 52
22,979,002 77
88,985,645 75
1906
119,032,841 75
24,934,694 33
94,098,147 42
1907
130,915,324 19
28,965,070 61
101,950,253 58
1908
143,997,841 74
27,454,945 65
116,542,896 09
1909
156,976,273 01
34,231,062 84
122,745,210 17
1910
163,509,272 56
32,030,989 45
131,478,283 11
1911
174,394,997 51
32,154,342 95
142,240,654 56
1912
181,477,865 09
30,971,807 62
150,506,057 47
1913
193,189,076 31
41,581,991 46
151,607,084 85
1914
193,382,860 69
43,235,935 35
150,146,925 34
1915. ......
200,618,401 32
40,831,063 61
159,787,337 71
1916
213,647,436 34
37,996,936 34
175,650,500 00
1917
212,670,401 26
35,827,901 26
176,842,500 00
1918
... 241,633,829 47
38,233,016 67
203,400,812 80
1919
248,588,256 70
43,831,760 98
204,756,495 72
1920
273,689,485 13
60,020,647 78
213,668,837 35
1921
345,530,039 77
63,216,718 87
282,313,320 90
EXHIBIT "D
Schedule
of Real and Personal Property Assessments Since 1918
Personal
Year
Real estate
property
Grand totals
1898
$2,533,730,809
$548,987,900
$3,082,718,709
1899
2,932,445,464
545,906,565
3,478,352,028
1900
3,168,557,700
485,574,495
3,654,132,195
1901
... 3,237,778,261
550,192,612
3,787,970,873
1902
3,330,647,579
526,400,139
3,857,047,718
1903
4,751,550,826
680,866,092
5,432,416,918
1904
5,015,463,779
625,078,878
5,640,542,657
1905
5,221,582,301
690,561,926
5,912,144,227
1906
5,738,487,245
567,306,940
6,305,794,185
1907
6,240,480,602
554,861,313
6,795,341,915
1908
6,722,415,789
435,774,611
7,158,190,400
1909
6,807,179,704
443,320,855
7,250,500,559
1910
7,044,192,674
372,644,825
7,416,837,499
1911
7,858,840,164
357,923,123
8,216,763,287
1912
7,861,898,890
342,963,540
8,204,862,430
1913
8,006,647,861
325,418,440
8,332,066,301
1914
8,049,859,912
340,295,560
8,390,155,472
1915
... 8,108,760,787
352,051,755
8,460,812,542
1916
8,207,822,361
376,530,150
8,584,352,511
1917
8,254,549,000
419,156,315
8,673,705,315
1918
8,339,642,851
251,414,875
8,591,057,726
1919
8,428,322,753
362,412,780
8,790,735,533
1920
... 8,626,121,707
296,506,185
8,922,627,892
1921
9,972,985,104
213,422,175
10,186,207,279
148 INVESTIGATION OF AFFAIRS OF NEW YORK CITY.
EXHIBIT " E "
Schedule Showing Yearly Per Capita Cost and Average Per
Capita Costs Under the Various Administrations
Budget appropriations
Year:
1 898
Yearly exclusive
of appropriation
to provide
deficiency in
collection of
taxes
$77,473,084 77
93,520,082 03
90,778,972 48
98,100,413 43
Per capita
Total for four fPopulation,
years yearly
3,350,000
4
Yearly
$23 12
26 35
26 41
28 15
Lverage
for
four
years
1899
3 549 558
1900
3,437 202
1901
3,485,000
Total for Robert A. Van
Wyck, administration.
Year:
1902
$26 04
27 78
31 90
34 11
$98,619,600 88
97,119,031 10
106,674,955 09
109,817,593 03
$359,872,552 71
3,582,930
$27 53
26 58
28 45
28 53
1903
1904
1905
Total for Seth Low and
Geo. B. McClellan,
administration
3,653,501
3,750,000
3,850,000
412,231 180 10
Year:
1906
$116,805,490 37
127,421,505 66
140,572,266 17
153,622,701 06
4 014 304
$29 10
30 68
32 80
34 73
1907
4 152,860
1908 . .
4 285,435
1909 .
4 422,685
Total for Geo. B.
McCellan, administra-
tion...
538,421,963 26
Year:
1910
$159,128,270 37
163,967,835 16
177,802,889 77
190,411,441 16
4 766 883
$33 38
33 33
34 37
35 44
1911
4,983,385
5,173,064
5,372,983
1912
1913
*Total for William J.
Gaynor, administra-
tion
691 310,436 46
Year:
1914
$190,495,551 62
192,877,694 08
208,956,177 54
206,114,136 82
5,468,100
$34 84
34 53
37 29
35 92
1915
1916
5,585,772
5,602,841
5,737,492
1917. . .
*Year 1313 of Mayor Gaynor's adminsitration completed by Ardolph L. Kline,
t Population estimated except in census years.
REPORT OF JOINT LEGISLATIVE COMMITTEE
149
EXHIBIT " E " (Concluded)
Schedule Showing Yearly Per Capita Cost and Average Per
Capita Costs Under the Various Administrations
Budget appropriations
Year;
Total for John Purroy
Mitchell, administra-
tion
Year:
1918 $235,023,759 00
1919 246,190,435 00
1920 272,014,485 13
1921.. . 343,850,039 77
Yearly exclusive
~^
of appropriation
to provide
deficiency in
collection of
Total for four Population,
taxes
years yearly
$798,443,560 06
5,872,143
6,006,794
5,620,048
5,753,151
Total for John F. Hylan,
administration.. 1,097,078,71890
Per capita
Average
for
four
Yearly years
$35 65
47 18
150 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
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EXHIBIT " H "
Schedule of Special Revenue Bond Authorizations During Year
1920
Armory Board $30,359 96
Bellevue and allied hospitals 92,605 19
Board of Aldermen and City Clerk 66,800 00
Board of City Record 294,371 37
Department of Public Welfare 240,724 9'2
County Clerk, Kew York county 2,985 78
County Clerk, Kings county 655 82
County Clerk, Queens county 6,878 20
County Clerk, Richmond county 2,401 88
County Clerk, Bronx county 670 83
Claims 963,620 70
Commissions and commissioners 295,330 90
Public Service Commission 117,890 52
College of the City of Xew York 89,149 62
Courts 444,610 28
District Attorney 37,015 31
Department of Plant and Structures 1,093,501 42
Department of Correction 19,959 37
Department of Docks 85,298 3
Department of Education 13,060,480 11
Department of Health 247,150 13
Department of Parks, Manhattan and Rich-
mond 84,955 59
Department of Parks, The Bronx 49,145 62
Department of Parks, Brooklyn 51,805 09
Department of Parks, Queens 14,389 86
Department of Street Cleaning 6,899,970 76
Department of Taxes and Assessments 6,657 73
Department of Water Supply, Gas and Elec-
tricity 169,513 38
Fire Department 1,732,812 15
Miscellaneous 6,027,288 72
Hunter College of the City of New York. . . . . . 31,567 66
President, Borough of Brooklyn 502,712 10
Police Department 173,628 83
President, Borough of Manhattan 1,191,187 04
President, Borough of Queens 648.586 51
President, Borough of Richmond 217,439 80
156 INVESTIGATION OF AFFAIRS OF ^EW YORK CITY
President, Borough of the Bronx $393,742 76
Registers ; 189,433 43
Sheriffs 26,386 39
New York City Employees' Retirement System. 13,184 58
Tenement House Department 4,562 89
Dreamland Park award 2,113,749 77
Total $37,735,181 35
EXH!BIT "I"
The Story of the City's Sinking Fund Transactions During 1920
The interlocking and interweaving hodge-podge of revenues,
internal investments, contributions, redemptions, interest pay-
ments and transfers all gather into a single collection of fiscal
accounts in the City Comptroller's office, constituting a record
which may be best interpreted by tracing the origin and final
resting place of the various moneys, with some attempt toward
making a statement of sinking fund affairs in the order of their
occurrence. The so-called inter se transactions are marked (*)
in each case.
An old and underlying account bears the title :
SINKING FUND FOR THE PAYMENT OF INTEREST ON THE CITY DEBT
In this fund there was a cash balance on January 1,
1920, of $1,639,420 39
To this was added within the year ended December
31, 1920, revenue received by the city, in cash, and
paid directly into this fund on account of Croton
water rents and penalties $9,471,722 74
Moneys received from the city treasury on account
of the redemption of its obligations as held for
investment by this fund (See Schedule "A") ... 2,305,000 00
Receipts from municipal ferry operations, paid
directly into this fund 1 , 633,677 56
Ferry rents and leases 346,573 08
Fees, fines, penalties, costs, etc 1 ,665,568 49
House and ground rents 452 , 101 07
Interest on deposit 47 , 531 60
Revenue and investments 110,936 72
Interest on Croton water rents 48 , 345 96
Water lot rent 599 10
Fares Astoria ferry 27,060 51
16,109,11683
This makes a total for the year $17,748,537 22
EEPORT OF JOINT LEGISLATIVE COMMITTEE 157
Out of which there were disbursements in cash as
follows:
Investments in Corporate Stock Notes of the City
of New York issued in anticipation of the sale of
corporate stock (See Schedule " B ") $3,200,000 00
Interest charges met on city debt incurred prior
to January, 1898 476,372 OS
Refunds of revenue 21 , 863 66
Payments of contributions to sundry societies. . 13,470 00
These disbursements, in connection with the
balance of cash on hand on December 31. 1920,
of... 736,831 48
Aggregated the sum of $4,448,537 22
*The remainder becoming a matter of transfer to
another account, amounting to the sum of $13,300,000 00
The account to which this transfer was made is called: == =====
Sinking Fund for the redemption of the City Debt No. 1
The cash balance of this account on January 1, 1920,
was $940, 106 13
*And in addition to the transfer above described,
amounting to $13,300,000 00
There were receipts as follows:
Investments of this fund purchased by Sinking
Fund of the City of New York 6,675,780 67
"Investments of the fund maturing in 1920 and
redeemable from and purchased by the Sinking
Fund of the City of New York 230,686 78
Moneys received from the city treasury on account
of the redemption of its obligations as held for
investment by the fund (See Schedule "A") - - 2,600,000 00
Dock and slip rents 6,974,093 31
Forfeited security deposit 16,800 00
Market and cellar rents 420, 150 26
Market wagon fees 18 , 873 25
Privileges 11,652 44
Franchises 501,753 33
Permits, street vaults 210,089 97
Fees, fines and penalties 1 , 353 00
Licenses 333,701 00
Interest on sinking fund deposits 54 , 907 81
Interest on city treasury balances 607,899 41
Interest on general fund bonds 9,500,547 96
Interest on all other bonds 1,448,455 73
Water lot quit rent 7 36
Chamberlain's commission of State tax 10,660 23
Collections by collector of assessments and arrears 42 65
Interest on assessments 03
42,917,455 19
This makes a total for the year $43,857,561 32
Out of which there were disbursements in cash as
follows:
Investments in corporate stock notes of the City
of New York, issued in anticipation of the sale
of corporate stock $3,610,000 00
Redemption of corporate stock held by the public 7 , 305 , 300 00
*Redemption of corporate stock maturing in 1920,
held by the Sinking Fund of the City of New
York.. 172,00000
158 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
Refunds of revenue $1 , 986 18
These disbursements, in connection with the bal-
ance of cash on hand December 31, 1920, of. . 268,275 14
Aggregated the sum of $11,357,561 32
The remainder becoming a matter of transfer to the
city treasury, and by it devoted to the acquire-
ment of general fund bonds amountin* to the sum
of $32,500,000 00
The other sinking funds of the City of New York
are detailed as follows:
Sinking Fund of the City of New York
The cash balance of this account on January 1,
1929, was $553,631 12
To this was added during the year, cash receipts
as follows:
Annual installment from 1920 tax budget $8,000,090 00
Revenue from investments 4,006,435 32
Moneys received from the city treasury on
account of redemption of its obligations, as
held for investments by this fund (See Sched-
ule "A") 10,630,000 00
*In vestments of this fund maturing in 1920,
redeemed by sinking fund for redemption of
City Debt No. 1 172,000 00
*Investments of this fund maturing in 1920,
redeemed by Water Sinking Fund, City of
New York 25,000 00
terest on balances of sinking fund bank
deposits 21,636 84
apid transit railroad rentals. . 4,234 54
22,859,306 70
This makes a total for the year $23,412,937 82
Out of which there were disbursements in cash as
follows :
Investments in corporate stock of the City of New
York $1,396,000 00
Investments in miscellaneous securities of the City
of New York (See Schedule " B ") 1 , 760,000 00
Investments in serial bonds of the City of New
York (See Schedule " B ") 700,000 00
Investments in corporate stock notes of the City
of New York, issued in anticipation of the sale
of corporate stock (See Schedule " B ") 12,430,000 00
*Investm.ents of the sinking fund for the redemp-
tion of city debt (No. 1 purchased) 6,675,780 67
*Redemptions of corporate stock held by the
sinking fund for the redemption of City Debt
No. 1 230,686 78
Accrued interest on corporate stock purchased as
investment 6, 456 76
Installments of rapid transit rentals paid to this
account in 1919 in error 40,248 52
These disbursements in connection with the
balance of cash on hand. December 31, 1920, of 173,765 09
Aggregated the sum of 23,412,937 82
REPORT OF JOINT LEGISLATIVE COMMITTEE 159
Rapid Transit Sinking Fund of the City of New York
The cash balance of this account on January 1, 1920,
was $39,079 46
To this was added during the year, cash receipts as
follows :
Annual installment for 1920 tax budget $1 ,225,000 00
Revenue from investments 262,709 33
Moneys received from the city treasury on account
of the redemption of its obligations as held for
investments by this fund (See Schedule "A") . . 300,000 00
*Rapid transit installments paid to this fund by
the Sinking Fund of the City of New York
which were paid to that fund in the year 1919
in error 40,248 52
Interest en balance of sinking fund bank deposits 1,400 15
1,829,358 00
This make a total for the year $1 , 868 , 437 46
Out of which there were disbursements as follows:
Investments in corporate stock notes of the City
of New York issued in anticipation of the sale
of corporate stock (See Schedule " B ") $555,942 73
Investments in corporate stock of the City of New
York (See Schedule " B ") 1,303,000 00
These disbursements in connection with the
balance of cash on hand December 31, 1920, of 9,494 73
Aggregated the sum of 1,868,437 46
Water Sinking Fund of the City of New York
The cash balance of this account on January 1, 1920,
was $108, 948 08
To this was added during the year, cash receipts as
follows:
Moneys received from the city treasury on account
of the redemption of its obligations as held for
investments by the fund (See Schedule "A") . . $4,500,000 00
Revenue from investments 820,030 78
Interest on balances cf sinking fund bank deposits 8,930 02
5,328,960 80
This makes a total for the year $5,437,908 88
Out of which there were disbursements in cash as
follows:
Investments in miscellaneous bends of the City
of New York (See Schedule " B ") $600,000 00
Investments in corporate stock notes of the City
of New York issued in anticipation of the sale
of corporate stock (See Schedule " B ") 700,000 00
*Redemption of corporate stock held by the public 4, 012 , 1 10 00
*Redemption of corporate stock held by the
Sinking Fund of the City of New York 25,000 00
These disbursements in connection with the
balance of cash on hand December 31, 1920, of 100,798 88
Aggregated the sum of 5,437,908 88
160 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
Sinking Fund of the City of Brooklyn
The cash balance of this account on January 1, 1920,
was $129,832 43
To this was addei during the year cash receipts as
follows:
Bonds and mortgages, East Side Parkland:
Principal $3,024 00
Interest 2,019 20
Moneys received from the city treasury en account
of the redemption of its obligations as held for
investments by this fund (See Schedule "A") . . 700,316 96
Prospect Park improvement:
Installments 191 04
Interest on installments 89 77
Revenue from investments 289,616 34
Interest on balances of sinking fund bank deposits 3,537 61
998,794 92
This makes a total for the year $1, 128,627 35
Out of which there were disbursements 6f cash as
follows :
Investments in corporate stock notes of the City
of New York issued in anticipation of the sale
of corporate stock (See Schedule " B)" $250,000 03
Investments in tax notes of the City of New York
(S3e Schedule " B ") 250,000 00
Investments in serial bonds of the City of New
York (See Schedule " B ") 400,000 00
Redemption of corporate stock held by the public 95,000 00
These disbursements in connection with the
balance of cash on hand December 31, 1920, of 133,627 35
Aggregated the sum of 1,128,627 35
Water Sinking Fund of the City of Brooklyn
The cash balance of this account on January 1, 1920,
was $44,438 62
To this was added during the year cash receipts as
follows:
Moneys received from the city treasury on account
of the redemption of its obligations as held for
investments by this fund (See Schedule "A") . . $1,500,000 00
Surplus water rents from water revenue, borough
of Brooklyn 3,284,445 70
Revenue from investments 196,041 40
Interest on balances of sinking fund bank deposits 10, 299 49
4,990,786 59
This makes a total for the year $5 , 035 , 225 21
Out of which there were disbursements in cash as
follows:
Investments in corporate stock of the City of
New York (See Schedule " B ") $600,000 00
Investments in serial bonds of the City of New
York (See Schedule " B ") 425,000 00
Investments in miscellaneous bonds of the City
of New York (See Schedule " B ") 400,000 00
Investments in corporate stock notes of the City
of New York issued in anticipation of the sale
of corporate stock (See Schedule " B ") 3,490,000 00
Purchases from the public of New York city
securities 74,605 00
REPORT OF JOINT LEGISLATIVE COMMITTEE 161
Accrued interest on bonds purchased from the
public $1,054 95
These disbursements in connection with the
balance of cash on hand December 31, 1920, of 44,565 26
Aggregated the sum of $5,035,225 21
Sinking Fund of the Long Island City for the Redemption of Fire Bonds
The cash balance of this account on January 1, 1920,
was $11,656 54
To this was added during the year cash receipts as
follows:
Revenue from investments $690 00
Interest on balances of sinking fund bank deposits 239 98
929 98
This makes a total for the year $12,586 52
There were no expenditures from this fund during
the year 1920.
The cash balance on hand December 31, 1920, was $12,586 12
The general method of making transfers between funds, at least
as regards all of the largest of those transfers, has been uniform
in the years prior to 1920 as far back as 1903, in which year
charter authority was granted to the acquiring of general fund
bonds. For example, the annual transfers from the interest
sinking fund account to the No. 1 account corresponding with
the item of $13,300,000 in 1920 are found to have been as
follows: '
Year Amount
1898 $2,500,000 00
1899 1,500,000 00
190-0 1,500,000 00
1901 3,000,000 00
1902 4,750,000 00
1903 4,515,000 00
1904 4,300,000 00
1905 4,950,000 00
1906 5,650,000 00
1907 7,450,000 00
1908 8,000,000 00
1909 9,250,000 00
1910 9,000,000 00
1911 8,000,000 00
1912 7,000,000 00
1913 11,250,000 00
6
162 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
Year Amount
1914 11,700,000 00
1915 10,650,000 00
1916 9,700,000 00
1917 *11,300,000 00
1918 11,250,000 00
1919 11,250,000 00
EXHIBIT J ?:
Hon. SCHUYLER M. MEYER, Chairman,
Hon. ELON K BROWN, Chief Counsel,
New York State Legislative Committee to Investigate
Affairs of the City of New York:
DEAR SIRS. The problem of providing a proper system of
sounder amortization of the city's bonds held by the public is the
most serious problem arising from the city's funded debt. A
tabulation of all the maturities from 1922 to 1967, inclusive,
shows that these were of record by the city as outstanding debt,
on December 31, 1920, in the aggregate sum of $914,441,412.68.
These issues were put out without any attempt to average the
maturities by years. The borrowings were not required in the
course of a long and uniform spreading out of constructive or
other needs, necessitating the issue of about so many bonds in
each of several years. The single project of rapid transit piled
up a huge obligation needing to be met years hence, but no better
apportioned to the fiscal opportunities of those future years than
to present a series of balances (at least as now outstanding) of:
Maturities 1954 to 1960, inclusive 427 millions
Maturities 1961 no maturities
Maturities 1962 to 1967, inclusive 307 millions
734 millions
or about 80 per cent of the entire 914 millions, and this 80 per
cent calling for redemption in the 14 years beginning with 1954.
No redemptions are to occur in 1931, 1938, 1939, 1943, 1944,
1945, 1946 and 1947.
* This amount includes an item of $800,000.00 which is an Investment in Rapid
Transit Railroad Note No. 2026, purchased by the Sinking Fund for the payment of
interest on the City Debt from the Sinking Fund for the Redemption of City Debt
No. 1.
REPORT OF JOINT LEGISLATIVE COMMITTEE 163
Furthermore the operations of sinking fund purchases of the
city's own securities have had, and as long as continued must
always have, the effect of constantly disarranging the quantities
of oncoming annual redemption of publicly held bonds.
It is manifest that with but 70 millions of debt coming due
between 1922 and 1936, and 62 millions coming due between
1937 and 1951, some fair, sound, business-like scheme of amortiza-
tion is needed to provide for the enormous demands which may
be made upon the city's treasury within the few years to follow
the middle of the present century, and which will be made unless
there are large refunding operations.
Such a scheme is available and is herein presented. It com-
bines four main features, viz. :
First. A fixed sum of annual contributions, subject to no
variation whatever until 1967, save as the compounding interest
rate of 5 per cent on sinking fund investments may prove to be
slightly above or below the average money rate for such invest-
ments throughout the entire period.
Second. It automatically rises by gradual steps, i. e. y accre-
tions of unused balances, year by year, to a peak of 279 millions
of dollars in the fund by 1953, and descends to a negligible sum
left over, at the end of 1967, amounting to less than $30,000.
Third. The annual installment to be raised, $42,800,000 an-
nually, is a less sum than the aggregates of simple debt, plus
interest on unpaid debt, in 21 of the 46 years beginning with
1922, and in fact less than the amount of the city's needs to
redeem bonds and pay interest during that first year, 1922, to wit,
$44,343,103.64.
Fourth. The accumulation of interest on sinking fund bal-
ances during the 46 years, figured at 5 per cent, or made equal
to that rate of income by budgetary adjustment in any year in
which there might be a surplus or deficiency, is an aggregate
income of no less than $234,543,352.56, all of which except an
odd $29,000 of final surplus may be made applicable to the re-
tirement of a volume of debt now ev^eeding nine hundred millions
of dollars.
In support of the plan a tabulation is appended hereto show-
ing the details, year by year. Of its seven columns the first three,
showing (1) debt to be met, (2) decreasing volumes of interest,
and (3) the total burden of each year, will he found to be self-
164 INVESTIGATION OF AFFAIES OF NEW YOEK CITY
explanatory. To these charges, in a fourth column, is added
(4) the average cost of meeting payments at different periods
within each year. The fifth, sixth and seventh columns are of
the nature of credits, i. e., respectively, (5) the values of $42,-
800,000 contributed at the beginning of each year and invested
at 5 per cent until the end of that year, (6) the increment at the
same rate of interest on unexpended balances, and (7) the balances
themselves, at the end of each year, cleared of redemptions, in-
terest charges, and carrying charges (averaged) on the disburse-
ment of interest,
These figures are offered as a fair general statement of condi-
tions, prepared on an actuarial basis. We believe that this method
can be availed of as the solution of one of New York city's most
compelling problems. If sinking funds are hereafter created, in
respect of new debt, the same plan may be applied or serial bonds
issued without sinking funds at approximately balanced dates of
maturity.
The raising of the fixed annual contributions for amortization
purposes should be mandatory, varied by no surpluses or de-
ficiencies except as the 5 per cent compounding interest rate might
be found to vary. The character of investments should be care-
fully restricted, but with such restrictions the city may safely
and confidently avail itself of the plan. It provides the utmost
of protection to the bondholders ; it relieves the inequalities which
now imperil fiscal safety in future years, when vast, wholly un-
classified obligations will need to be faced ; it is a method in accord
with the principles of such business foresight as is exercised by
the largest corporations, notably banks, insurance companies, and
many other organizations which need to take a forward look at
large problems demanding scientific provision for debt service,
based on the strictest of amortization.
Very respectfully yours,
PEKINE & NICHOLS.
New York, N. Y., September 9, 1921.
REPORT OF JOINT LEGISLATIVE COMMITTEE
165
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166 INVESTIGATION OF AFFAIBS OF NEW YORK CITY
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REPORT OF JOINT LEGISLATIVE COMMITTEE 167
EXHIBIT " K "
Memorandum by Counsel for the Joint Legislative Committee on
the Constitutional Limitation of the Taxing Power of the City
of New York
The 2 per cent tax limit is fixed and determined by the valua-
tion of the real and personal estate of the city as shown hy the
last or 1920 assessment rolls, and not as shown by the 1921 assess-
ment rolls. The city has therefore in 1921 exceeded the pre-
scribed tax limit by $20,000,000.
This proposition is supported in Emerson, et al. f constituting
the Board of Education of the City of Buffalo v. Buck, et al.,
constituting the Council of the City of Buffalo, 230 K Y. 380,
decided by the Court of Appeals March 1, 1921.
The controversy arose between the City Council and the Buffalo
Board of Education. The demands of the Board of Education
coupled with the requirements of other departments of the city
government would have increased the budget beyond the consti-
tutional tax limit provided that limit was fixed by the valuation
of the preceding year. The assessment for the current year 1920
had been raised about $50,000,000, and if the limit was applicable
to such assessment, the city had abundant taxing power to meet
all the demands made by the board. The case was one for man-
damus. Distinguished counsel were employed on both sides, and
adopted without controversy the assessment of the prior year
as the measure of the tax limit. The Court of Appeals in its
opinion adopted this rule, and applied it in making its decision.
The case is therefore on all four with the question as presented
in New York.
The proposition is supported by reason as well as by authority.
This provision in the constitution was adopted in 1884 by
article 8, section 11, and now appears in section 10 of article 8,
and reads as follows : " The amount hereafter to be raised by
tax for county or city purposes in any county containing a city
of over one hundred thousand inhabitants or any such city of
this State, in addition to providing for the principal and interest
of existing debt, shall not in the aggregate exceed in any one year
two per centum of the assessed valuation of the real and personal
estate of such county or city, to be ascertained as prescribed in
this section in respect to county or city debt."
The provision referred to " in this section in respect to county
or city debt" reads "No county or city shall be allowed to be-
168 INVESTIGATION OF AFFAIBS OF NEW YORK CITY
come indebted for any purpose or in any manner to an amount
which including existing indebtedness shall exceed ten per centum
of the assessed valuation of the real estate of such county or city,
subject to taxation as it appeared by the assessment rolls of said
county or city on the last assessment for state or county taxes
prior to the incurring of such indebtedness/'
Applying the language of the latter provision to the former,
the provision would read, " The amount hereafter to be raised by
tax for county or city purposes in any county containing a city
of over one hundred thousand inhabitants, or any such city of this
State, in addition to providing for the principal and interest of
existing debt, shall not in the aggregate exceed in any one year
two per centum of the assessed valuation of the real and personal
estate of such county or city [to be ascertained as prescribed in
this section in respect to county or city debt] subject to taxation
as it appeared by the assessment rolls of said county or city on
the last assessment for State or county taxes prior thereto/'
The plain meaning of this language is that the limitation is
as to the assessment of taxes in the preceding year.
(a) The assessment rolls referred to are not the assessment
rolls in the course of preparation by the tax department, for use
in assessing the State or county taxes, but they are the complete
assessment rolls " of said city on the last assessment for state or
county taxes prior thereto/' after such assessment or levy is made
by the Board of Aldermen. It cannot be said that there was an
assessment for 'State and county taxes when the assessment rolls
of 1921 were prepared and delivered to the Board of Aldermen.
It is true that the real and personal estate of the city had been
set down in the assessment rolls, and those assessment rolls deliv-
ered to the Board of Aldermen for the purpose of assessing or
levying the taxes, but it cannot be said that such rolls of 1921
were the rolls " on the last assessment for state or county taxes
prior thereto" at the time the city tax of 1921 was levied.
Assessment rolls are not completed until the tax is extended,
and the extension is not finally completed until the warrant is
signed fixing the levy, as the board may change or correct the
extension of the tax until the warrant is issued, when it passes
beyond their jurisdiction. Under existing statutes this must be
done by March 28th. When the said levy was made in March,
the last assessment for State or county taxes was the assessment
of 1920 and not the assessment of 1921, and the reference is,
therefore, to the rolls of 1920 and not to the rolls of 1921.
REPORT OF JOINT LEGISLATIVE COMMITTEE 169
The word " assessment " clearly means the completed assess-
ment or levy, and not uncompleted assessment rolls submitted to
the aldermen who extend and levy the tax, and the reference is
not to incomplete but to complete assessment rolls.
(b) The limitation should be construed to refer to an assess-
ment for State and county purposes in the preceding year. It
will be noted that the tax imposed cannot " in the aggregate
exceed in any one year two per centum of the assessed valuation
of the real and personal estate of such county or city as it
appeared by the assessment rolls of said county or city on the
last assessment for state or county taxes." The year referred
to is a calendar year. When a levy of city taxes is to be made,
the test to be applied is, " Will such tax with prior taxes in the
same year exceed two per cent ? " If so, it is prohibited. It is
not a reasonable interpretation of the provision to refer it to the
assessment of State or county taxes levied during such year, since
it is the " aggregate " of city taxes for the year which is referred
to 3 former assessment. If it does not refer to the prior year,
the following situation might arise: The city might levy two
taxes in the same year, one before and one after the levying of
the State and county taxes for that year. It is intolerable that
a tax levy by the city should ever, in any contingency, depend
for its validity upon an assessment for State or county taxes made
after such city tax was levied. The levy of the first city tax in
such a case would have a constitutional limit in the assessment
for State or county taxes for the preceding year, and the later
levy would have a constitutional limitation based on the same
year. It is equally intolerable that such a limit on the first levy
during the year by the city should be a different and other limit
than the limit on a second levy by the city in the same year,
made after the State and county taxes were levied for that year;
or that the limit should be one figure for part of the year, and
another figure for another part of the same year. It cannot be
that the framers of the Constitution intended to make the limita-
tion of 2 per cent in the aggregate in any one year depend upon
the statutory calendar for levying taxes of that year, or upon a
levy of State or county taxes during the year.
(c) The language of the amendment " as it appeared " by the
assessment rolls on the last assessment of State or county taxes
refers to a past event, not to a concurrent event. Had it referred
to the assessment rolls on which the tax for 1921 was levied, the
170 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
language would have been in the present tense, and not in the
past tense. It would then have read " as it appears " instead of
reading " as it appeared."
It must be borne in mind that the levy of the city taxes is not
necessarily made at the same time as the levy of the State and
county taxes. As this is statutory, and the statute could provide
for the levy of the city taxes in January and the levy of State
and county taxes, not in March or April, but in any other month
down to December, it is clear that if the State taxes were levied
in December, and the city taxes in any preceding month, the
limitation of 2 per cent would be on the assessment rolls used
in levying the last State and county taxes. The levy is now
made concurrently, at the same time, to wit, on March 28th,
and the limitation as to city taxes is 2 per cent of the real and
personal estate as it appeared by the assessment rolls on the " last
assessment " for State or county taxes. This language is not
apt to describe the assessment rolls on which the tax for State
and county purposes, and for city purposes, is concurrently levied.
The levy is limited by what appeared at a previous assessment,
and not by what appears at a present assessment. The present
assessment is not a past event and the reference is clearly to a
past event. The Board of Aldermen being ready to levy the
tax must consult the " last assessment for state and county taxes "
to find the limitation on their power to levy and not to the assess-
ment for State and county taxes they are about to levy.
(d) The city authorities have to be advised of the limit of the
city's capacity to incur expense within the 2 per cent limit during
the period prior to the assessment. The city expenditures for
which the year's taxes provide, are going on for three months
before the assessment is made. In fact the budget is adopted by
the Board of Estimate five months before the assessment, or by
November 1st of the preceding year. It cannot be that the city
is to make up its tax budget or incur expense without reference
to this limitation until the assessment is completed later in the
year. Nor can the city have one limitation, namely, on the
assessment of the preceding year until the new assessment is made,
and then change the limitation to the new assessment, having two
limitations in the same year. The new assessment might be less
than the assessment of the former year. The limitation must be
one and invariable, and if the new assessment shows a smaller
tax roll, the tax will still be justified if not more than 2 per cent
of the assessment roll of the preceding year.
REPORT OF JOINT LEGISLATIVE COMMITTEE 171
The importance of this suggestion was greater under the char-
ter of the City of New York as it stood at the time the constitu-
tional amendment of 1884 was adopted than now. Then the
assessment was not made until July, and as statutes in force at
the time may be considered in the interpretation of a constitu-
tional enactment, regard will be had to the law and practice pre-
vailing at the time.
It has been suggested that the purpose of the Constitution was
to limit the levy to 2 per cent of the assessment roll. This sug-
gestion would be stronger if it were not for the fact that the 2
per cent limitation is in addition to providing for the interest
and principal of the existing debt. The limitation is, therefore,
never 2 per cent, but 2 per cent plus the interest and principal
of debt. I think the more reasonable construction is that the
limitation when fixed had to be an arbitrary one, and 2 per cent
was fixed as that arbitrary limit. The basis of the tax on which
the 2 per cent was levied had also to be arbitrary, and that was
fixed as the last assessment for State or county taxes. I there-
fore see nothing in the provision which connects the 2 per cent
with the valuation in the year in which the tax is levied.
EXHIBIT " L "
Memorandum by Counsel for the Joint Legislative Committee
on the Constitutional Limitations of the Debt Incurring
Power of the City of New York.
The Constitution does not warrant the exclusion of $120,000,000
of dock and rapid transit bonds for general purposes, as appears
in the comptroller's debt limit statement. The exclusion can be
made for a specific purpose only, and the debt incurring power
of the city is increased for no other purpose. Except for a
special purpose, the excluded bonds as well as the debt incurred
after their exclusion must be treated as a part of the debt of
the city in determining its debt limit.
The limitations are all contained in section 10, article 8, of
the Constitution, as amended in 1909, a copy of which is hereto
annexed, with the italic type showing the amendments then made.
A further amendment was made in 1917 to exclude the water
debt in cities of the first class other than the City of New York,
but in no way changing the limitations as to New York. The
section has grown out of section 9, article 8, of the Constitution
of 1846, which was amended as section 11, article 8, in 1874
172 INVESTIGATION OF AFFAIRS OF NEW YOKE: CITY
and 1884, and as section 10, article 8, in 1894, 1899, 1903 and
1907. The clause under discussion in the amendment of 1909
reads :
(1) " and except further that any debt hereafter incurred
by the city of New York for a public improvement owned
or to be owned by the city, which yields to the city current
net revenue, after making any necessary allowance for repairs
and maintenance for which the city is liable, in excess of
the interest on said debt and of the annual instalments neces-
sary for its amortization may be excluded in ascertaining the
power of said city to become otherwise indebted, provided
that a sinking fund for its amortization shall have been
established and maintained and that the indebtedness shall
not be so excluded during any period of time when the
revenue aforesaid shall not be sufficient to equal the said
interest and amortization instalments ; "
(2) " and except further that any indebtedness hereto-
fore incurred by the city of New York for any rapid transit
or dock investment may be so excluded proportionately to
the extent to which the current net revenue received by said
city therefrom shall meet the interest and amortization instal-
ments thereof, provided that any increase in the debt incur-
ring power of the city of New York which shall result from
the exclusion of debts heretofore incurred shall be available
only for the acquisition or construction of properties to be
used for rapid transit or dock purposes. The legislature
shall prescribe the method by which and the terms and con-
ditions under which the amount of any debt to be so excluded
shall be determined, and no such debt shall be excluded
except in accordance with the determination so prescribed.
The legislature may in its discretion confer appropriate
jurisdiction on the appellate division of the supreme court
in the first judicial department for the purpose of deter-
mining the amount of any debt to be so excluded."
The city could thus increase its debt-incurring power for dock
and rapid transit construction (but for no other purpose) by
the exclusion of self-supporting past indebtedness incurred for
these purposes. The test would then be, if the city exceeded its
normal debt-incurring power, whether the excess over such normal
limit was in fact incurred for docks and rapid transit.
The purpose of the enactment of 1909, briefly stated, was to
enable the city to increase its debt-incurring power, by excluding
IXEPOET OF JOINT LEGISLATIVE COMMITTEE 173
from the city debt self-supporting investments whether in docks,
rapid transit or other municipal income paying enterprises. But
while conferring this power, extraordinary precautions were taken
against increasing the debt-incurring power for investments in
enterprises that were not self-supporting.
(a) By providing,
"And except further that any debt hereafter incurred
by the city of .New York for a public improvement owned
or to be owned by the city, which yields to the city current
net revenue, after making any necessary alloivanee for
repairs and maintenance for which the city is liable, in
excess of the interest on said debt and of the annual install-
ments necessary for its amortization may be excluded in
ascertaining the power of said city to become otherwise
indebted, provided that a sinking fund for its amortization
shall have been established and maintained and that the
indebtedness shall not be so excluded during any period of
time when the revenue aforesaid shall not be sufficient to
equal the said interest and amortization installments/'
The exemption ceases to be effective as soon as the enterprise
ceases to be self-supporting, or requires the imposition of a tax
on the city.
(b) By providing,
" and except further that any indebtedness heretofore
incurred by the city of New York for any rapid transit or
dock investments may be so excluded proportionately to the
extent to which the current net revenue received by said
city therefrom shall meet the interest and amortization
installments thereof, provided that any increase in the debt
incurring power of the city of Neiv York which shall result
from the exclusion of debts heretofore incurred shall be
available only for the acquisition or construction of prop-
erties to be used for rapid transit or dock purposes."
The city has assumed that by making an expenditure equal
to such excluded bonds, the exclusion becomes complete for all
purposes ; or, stated in another way, that after adding to the city
debt by expending $120,000,000 in nonself-supporting municipal
enterprises (principally rapid transit) it was also entitled, in
determining its debt-incurring power, to deduct for all purposes
the bonds, excluded by the Appellate Division for a single pur-
174: INVESTIGATION OF AFFAIRS OF NEW YORK CITY
pose, and treat them as exempt like water bonds. The effect of
this process has been to increase the city's debt-incurring power
for all purposes, and so of course for other purposes than docks
or rapid transit, beyond what it was before the constitutional
enactment.
Of course, but for this amendment both the bonds excluded
for past indebtedness and the new expenditure for rapid transit
and docks would have been computed as a part of the debt. The
terms of the enactment show that, except in the case of docks
and rapid transit, it was intended that both of such expenditures
should still be computed as part of the debt unless the new
expenditure came under clause (1) and became totally exempt
because it was self-supporting.
The suggestion is made that the failure to thus increase the
debt-incurring power, for other purposes than dock and rapid
transit, would cripple the city financially. The answer is that
it was the plain intention to do so, unless the city keeps within
the constitutional limitations imposed. The 10 per cent limit
was so intended, as were the carefully imposed restrictions in per-
mitting certain exceptions to this limit, including the provision
that exemptions for self-supporting enterprises will be lost or
suspended if and while they cease to be self-supporting. Neither
of these provisions is more drastic than the rule laid down as
applicable to all cities that " all indebtedness in excess of such
limitations except such as now may exist, shall be absolutely void
except as herein otherwise provided. No county or city whose
present indebtedness exceeds ten per centum of the assessed valua-
tion of its real estate subject to taxation, shall be allowed to
become indebted to any further amount until such indebtedness
shall be reduced within such limit.'' The purpose of these limita-
tions is clearly set forth by Judge Finch in the case of Rochester
v. Quintard, 136 N. Y. 221, where it is said:
et The obvious theory of the constitutional provision is
that the smaller cities of the state needed but one restraint
and that relating to the purpose and occasion of their indebt-
edness, and not to its amount. Such cities were not likely,
with their smaller necessities to make large loans and con-
tract heavy debts, and so were left without restriction upon
amounts or terms, save such as the citizens might themselves
impose. But the larger cities, with their greater needs and
the pressure of much more numerous non-taxpayers, and
their swarm of claimants on the public treasury, did need
REPORT OF JOINT LEGISLATIVE COMMITTEE
restraint, not only as to the purposes of the municipal indebt-
edness, 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 was 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 as the most
reasonable test capable of application."
It does not seem to have occurred to the city authorities that
the city could easily relieve itself of all embarrassment arising
from these limitations by ceasing to roll up a huge indebtedness,
which it has no intention of meeting, except by renewal or by
substitute obligations greater in amount than the debt redeemed.
It may relieve itself of any embarrassment from the situation
thus arising in several ways, some of which do not involve the
painful suggestion of part payment of the debt. As an illustra-
tion and considering the situation as of January 1, 1921, when
10 per centum of the assessed valuation of the real estate was
$862.000,000, and as such the measure of the debt-incurring
power of the city; if we assume that the city at that time had
incurred indebtedness to the full measure of $862,000,0-00, and
had also expended $120,000,000 for docks and rapid transit under
the exclusion of a like amount by the Appellate Division for that
specific purpose, the city would then have reached its debt limit
on docks and rapid transit and be over the debt limit for all other
purposes in the amount of $120,000,000.
It could be relieved of its embarrassment in three ways:
1. It could pay $120,000,000 in bonds, whether dock, rapid
transit or other bonds, and be restored to its financial condition
of solvency or zero, and no longer be over the debt limit.
176 INVESTIGATION OF AFFAIRS OF NEW YOKK CITY
2. It could increase its assessment more than a billion dollars,
as it has done in the last year, and thus restore its financial con-
dition to solvency or zero, and no longer be over the debt limit.
3. It could make the dock and rapid transit investment self-
sustaining. Such investment would then immediately come under
the first clause of the constitutional amendment of 1909, and as
a self-sustaining investment hereafter made, become an exempt
debt for all purposes. The city would thus be restored to finan-
cial solvency for general purposes or to zero.
It is true that the city would not in any of these supposed cases
have further debt-incurring power, except for docks or rapid
transit, until it had further increased its resources by another
step in one of the ways suggested, but being square with the
world, it would be in a position to seek and obtain further
resources according to its needs and capacities.
It may be further remarked :
(A) The increase in the debt-incurring capacity, arising from
the exclusion for a specific purpose only, of past indebted-
ness, would not have been exhausted by the expenditure of the
$120,000,000 for rapid transit and docks, had such investments
been made self-sustaining, for in that case the new investment
would immediately have become exempt and deducted from the
total indebtedness of the city. The city would then have been
in a position to invest another $120,000,000 in docks and rapid
transit and if it was self-sustaining and so within the terms of
the first clause of the amendment, suffer no loss of debt-incurring
power from the transaction, and the process could be indefinitely
repeated.
The potential increase in the debt-incurring capacity arising
from the exclusion of past indebtedness incurred for dock or rapid
transit, cannot, in view of the refusal to include such indebted-
ness for any other purpose, be effective until the debt limit for
other purposes is reached. It is not an exception as in the case
of water bonds, but an exclusion, when the debt limit is computed,
for docks and rapid transit only, and is a continuing increase in
the debt-incurring power for docks and rapid transit so long as
and as often as the new investment becomes self-sustaining.
(B) The objection that such a construction would deprive the
city of all debt-incurring power and thus prevent it from making
expenditures for necessary municipal purposes, is without force.
The provision was enacted in contemplation of the possible
REPORT OF JOINT LEGISLATIVE COMMITTEE 177
exhaustion of the debt-incurring power by the new investments
if they were not self-sustaining. At the same time this was
enacted (as of January 1, 1910) the provision for special revenue
bonds was enacted which provides that the 10 per cent limit
shall not prevent the City of New York from issuing bonds to
be redeemed out of a tax levy next succeeding the year of their
issue " provided the amount of such bonds which may be issued
in any one year in excess of the limitations herein contained,
shall not exceed one-tenth of one per centum of the assessed valua-
tion of the real estate of said city, subject to taxation."
ISTo limit was placed on special revenue bonds until the city
had otherwise reached its debt limit, and then they were reduced
to one-tenth of 1 per cent. This was clearly enacted with refer-
ence to the complete exhaustion of the city's debt-incurring power.
The whole section bristles with warnings against the exhaustion
of the debt-incurring power and visits the remedy on the offender.
(C) That such is the true construction is apparent from the
omission in the constitutional amendment of 1909 of a require-
ment for a sinking fund for debt incurred for rapid transit or
docks by reason of the exclusion of previous investment in docks
and rapid transit, the only requirement being in such case that
the exclusion for the special purpose shall be limited " propor-
tionately to the extent to which the current net revenue received
by said city therefrom shall meet the interest and amortization
installments thereof." The provision suspending the exclusion
during a period, if any, when the sinking fund was not main-
tained, or the revenue was not sufficient to equal the interest and
amortization installments, applicable to expenditure hereafter
made was not here repeated. A sufficient check against a non-
self-supporting investment was provided in the resulting loss of
debt-incurring power, and in the means opened to the city of
relieving itself of such loss by the provision under the first clause
exempting such debts completely where they were self-sustaining.
Both clauses must be construed together, and the constitutional
purpose apparent in both enforced. It is reductio ad absurdum
to conclude that as to indebtedness hereafter incurred for revenue
producing improvements, the city will be charged with the full
amount in limitation of its debt-incurring power, if adequate
provision be not made and maintained for interest and amortiza-
tion requirements from such revenues, and that the limitation
will be revived if there is a temporary suspension of the self-
support ; but that the city can incur at will, indebtedness to the
178 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
full amount of bonds excluded for a specific purpose only, with-
out any such check or any check whatever. Each provision sup-
ports the other. The investment under the excluded bonds would
tide the city over the period of construction. If the city was
unwilling to reduce its debt-incurring capacity by the new debt
it could be relieved under clause (1) by making it self-sustaining
either by the terms of the original investment or by increasing
the revenue from its operation.
A good deal of confusion arises from the use in the debt limit
statements of the word " exempt " in connection with past invest-
ments in docks and rapid transit. No such word occurs in the
Constitution. The word there used is " exclude " or " excluded,"
and the exclusion in case of expenditures hereafter made is for
general purposes and complete and may properly be described
as exempt. In the case under consideration, that is, for expendi-
ture heretofore made, the exclusion is for a special purpose only,
and not to be made use of for any other purpose, and therefore
not exempt. The argument that the city was enabled by this con-
stitutional provision to add to its debt by an unproductive invest-
ment without suffering a limitation of its debt-incurring power, is
not only in conflict with the specific amendment made in 1909, but
with the general scope and purpose of the constitutional provisions
limiting the indebtedness of cities. It is against the spirit of the
Constitution, destructive of the limitations it imposes for the
protection not only of the city, but of the State, and has been
conceived along lines too common in the City of New York of
finding some way to get the money without regard to consequences.
The conception that the exclusion of the rapid transit and dock
bonds was for all purposes, whether a like amount was expended
for a like purpose or not, first appears in the debt limit statement
of the Comptroller of December 31, 1910. The conception that
the expenditure for docks and rapid transit was to be allocated
to the bonds excluded, .first appears in the debt limit statement of
December 31, 1911. This later view manifestly did not obtain
when the statement of December 31, 1910, was made up, as
several million dollars were expended for docks and rapid transit
between the date of the order of exclusion and the making of the
statement. The absence of this statement of fact demonstrates
that that claim had not then taken shape. Later debt limit state-
ments made before the expenditure of the full amount of the
excluded bonds give the margin for " Rapid Transit only," and
the margin for " Various municipal purposes " separately. This
REPORT OF JOINT LEGISLATIVE COMMITTEE 179
statement is misleading as " Various municipal purposes "
included docks and rapid transit, and every dollar of the debt-
incurring power, however derived, and whether normal or extraor-
dinary, was available for rapid transit and docks ; but the impres-
sion is given that " various municipal purposes " does not
include docks and rapid transit.
The theory is now boldly put forth that the city is entitled to
the exemption of the bonds excluded, for all purposes, because
of the expenditure of moneys equal in amount to the dock and
rapid transit bonds excluded. The error springs from the con-
ception that the expenditure for docks and rapid transit came
out of a special fund created by the exclusion of the bonds before
the debt limit was reached; and that the increase in the debt-
incurring power was thus available for this purpose before the
normal debt-incurring power was exhausted. But the city could
not avail itself of an increase in the debt-incurring power for a
special purpose before the normal debt-incurring power for all
purposes was exhausted. It could not reserve its normal debt-
incurring power and exhaust the increase for a special purpose.
It is like attempting to consume the residue or remainder before
consuming the major part, or taking a journey from New York
to San Francisco and running first from Denver to Salt Lake City.
The debt-incurring power is one power, both before and after its
increase, and its exhaustion proceeds as debt is incurred. The
normal limit may be reached by indebtedness for any purpose,
including docks and rapid transit, and when reached the extraor-
dinary limit or increased debt-incurring power can be availed
of for docks and rapid transit only. If its extraordinary or
increased debt-incurring power be so exercised, it will be at the
expense of the debt-incurring power for every purpose, and the
limitation so created will remain until the debt is reduced below
the normal constitutional debt limitation.
The conclusion is, that the city has been over the debt limit
much of the time for ten years. By reason of the billion dollar
increase in the assessment, it now has a margin of $17,000,000
which may be increased in the several ways suggested in this
paper. If the conclusion here reached is ignored, the city will
exercise a debt-incurring power of $137.000,000, which with
present demands on the treasury is not likely to last through
another calendar year. There is no limit to the exhaustion of
the city's credit except the Constitution.
180 INVESTIGATION OF AFFAIRS OF NEW YOKK CITY
Limitation of Indebtedness of Counties, Cities, Towns and
Villages; Exception as to City of New York
[Constitution, Art. VIII, Sec. 10, as amended Nov. 2, 1909.]
,No county, city, town or village shall hereafter give any money
or property, or loan its money or credit to or in aid of any
individual, association or corporation, or become directly or
indirectly the owner of stock in,- or bonds of, any association or
corporation; nor shall any such county, city, town or village be
allowed to incur indebtedness except for county, city, town or
village purposes. This section shall not prevent such county,
city, town or village from making such provision for the' aid or
support of its poor as may be authorized by law. No county
or city shall be allowed to become indebted for any purpose or in
any manner to an amount which, including existing indebtedness,
shall exceed ten per centum of the assessed valuation of the real
estate of such county or city subject to taxation, as it appeared
by the assessment rolls of said county or city on the last assess-
ment for State or county taxes prior to the incurring of such
indebtedness; and all indebtedness in excess of such limitation,
except such as now may exist, shall be absolutely void, except as
herein otherwise provided. No county or city whose present
indebtedness exceeds ten per centum of the assessed valuation of
its real estate subject to taxation, shall be allowed to become
indebted in any further amount until such indebtedness shall be
reduced within such limit. 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; nor to prevent the city of New York from
issuing bonds to be redeemed out of the tax levy for the next year
succeeding the year of their issue, provided that the amount of
such bonds which may be issued in any one year in excess of the
limitations herein contained shall not exceed one-tenth of one
per centum of the assessed valuation of the real estate of said city
subject to taxation. Nor shall this section be construed to pre-
vent the issue of bonds to provide for the supply of water; but
the term of the bonds issued to provide the supply of water, in
excess of the limitation of indebtedness fixed herein, shall not
exceed twenty years, and a sinking fund shall be created on the
issuing of the said bonds for their redemption, by raising annually
REPOKT OF JOINT LEGISLATIVE COMMITTEE 181
a sum which will produce an amount equal to the sum of the
principal and interest of said bonds at their maturity. All cer-
tificates of indebtedness or revenue bonds issued in anticipation
of the collection of taxes, which are not retired within five years
after their date of issue, and bonds issued to provide for the supply
of water, and any debt hereafter incurred by any portion or part
of a city, if there shall be any such debt, shall be included in
ascertaining the power of the city to become otherwise indebted;
except that debts incurred by the city of New York after the
first day of January, nineteen hundred and four, and debts
incurred by any city of the second class after the first day of
January, nineteen hundred and eight, and debts incurred by any
city of the third class after the first day of January, nineteen hun-
dred and ten, to provide for the supply of water, shall not be so
included ; and except further that any debt hereafter incurred by
the city of Neiv York for a public improvement owned or to be
owned by the city, which yields to the city current net revenue,
after making any necessary allowance for repairs and mainte-
nance for which the city is liable, in excess of the interest on said
debt and of the annual instalments necessary for its amortization
may be excluded in ascertaining the power of said city to become
otherwise indebted, provided that a sinking fund for its amor-
tization shall have been established and maintained, and that the
indebtedness shall not be so excluded during any period of time
when the revenue aforesaid shall not be sufficient to equal the
said interest and amortization instalments, and except further
that any indebtedness heretofore incurred by the city of New York
for any rapid transit or dock investment may be so excluded pro-
portionately to the extent to which the current net revenue received
by said city therefrom shall meet the interest and amortization
instalments thereof, provided that any increase in the debt-incur-
ring power of the city of New York which shall result from the
exclusion of debts heretofore incurred shall be available only for
the acquisition or construction of properties to be used for rapid
transit or dock purposes. 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 determined, and
no such debt shall be excluded except in accordance with the
determination so prescribed. The Legislature may in its dis-
cretion confer appropriate jurisdiction on the Appellate Division
of the Supreme Court in the first judicial department for the
purpose of determining the amount of any debt to be so excluded.
182 INVESTIGATION OF AFFAIES OF NEW YORK CITY
No indebtedness of a city valid at the time of its inception shall
thereafter become invalid by reason of the operation of any of
the provisions of this section. Whenever the boundaries of any
city are the same as those of a county, or when any city shall
include within its boundaries more than one county, the power
of any county wholly included within such city to become indebted
shall cease, but the debt of the county, heretofore existing, shall
not, for the purposes of this section, be reckoned as a part of the
city debt. The amount hereafter to be raised by tax for county
or city purposes, in any county containing a city of over one
hundred thousand inhabitants, or any such city of this state, in
addition to providing for the principal and interest of existing
debt, shall not in the aggregate exceed in any one year two per
centum of the assessed valuation of the real and personal estate
of such county or city, to be ascertained as prescribed in this
section in respect to county or city debt.
EXHIBIT "M"
Analysis Showing the Number of Voters in Selected Election
Districts Who Own Real Estate Therein and Pay Taxes
Thereon, as Compared with Those Who Do Not
BOROUGH OF MANHATTAN
7 Assembly District 24 Election District
Total number of voters in district 580
Voters in district paying taxes on real estate 61
7 A. D. 30 E. D.
Total number of voters in district 341
Voters in district paying taxes on real estate 15
19 A. D. 20 E. D.
Total number of voters in district 417
Voters in district paying taxes on real estate 4
19 A. D. 23 E. D.
Total number of voters in district 527
Voters in district paying taxes on real estate 2
2 A. D. 15 E. D.
Total number of voters in district 494
Voters in district paying taxes on real estate 1
BOROUGH OF RICHMOND
1 Assembly District 7 Election District
Total number of voters in district 285
Voters in district paying taxes on real estate 4
v
REPORT OF JOINT LEGISLATIVE COMMITTEE 183
1 A. D. 19 E. D.
Total number of voters in district 307
Voters in district paying taxes on real estate 51
1 A. D. 13 E. D.
Total number of voters in district 415
Voters in district paying taxes on real estate 45
2 .4. D. 22 E. D.
Total number of voters in district 534
Voters in district paying taxes on real estate 62
A. D. E. D.
Total number of voters in district 497
Voters in district paying taxes on real estate 57
BOROUGH OF BROOKLYN
5 Assembly District 6 Election District
Total number of voters in district 480
pters in district paying taxes on real estate 53
21 A. D. 28 E. D.
Total number of voters in district 331
Voters in district paying taxes on real estate 7
6 A. D. 12 E. D.
Total number of voters in district 510
Voters in district paying taxes on real estate 61
6 A. D. 2 E. D.
Total number of voters in district 517
Voters in district paying taxes on real estate 18
6 A. D. 28 E. D.
Total number of voters in district 461
Voters in district paying taxes on real estate 20
BOROUGH OF BUONX
7 Assembly District 20 Election District
Total number of voters in district 569
Voters in district paying taxes on real estate 10
7 A. D. 23 E. D.
Total number of voters in district 644
Voters in district paying taxes on real estate 16
7 A. D. 25 E. D.
Total number of voters in district 577
Voters in district paying taxes on real estate 20
7 A. D. 1 E. D.
Total number of voters in district 512
Voters in district paying taxes on real estate 14
FIFTH REPORT
REPORT AND SUMMARY OF EVIDENCE CONCERNING
MANDATORY LEGISLATION, DEPARTMENTS OF
POLICE, LICENSES, MARKETS AND
PUBLIC WELFARE
[185]
REPORT AND SUMMARY OF EVIDENCE CONCERNING
MANDATORY LEGISLATION, DEPARTMENTS OF
POLICE, LICENSES, MARKETS AND
PUBLIC WELFARE
March 14, 1922.
To the Legislature and the Charter Revision Commission:
The New York State Joint Legislative Committee to Investi-
gate the Affairs of the City of New York submits herewith a
report and summary of the evidence dealing with certain admin-
istrative phases of the municipal and county governments, as
follows :
1. Mandatory Legislation Affecting the City of New York.
2. The Administration of the Police Department.
(a) Political Interference with Police Administration.
(b) Illegal Police Reinstatements.
(c) Demoralization of the Quartermaster's Division.
(d) 1918 Police Games.
(e) Speculation and Money Making by Police Officials.
3. Department of Licenses Division of Licensed Vehicles.
4. Department of Markets.
5. Department of Public Welfare Kings County Hospital
Job.
In the first report of the Committee, dated December 19, 1921,
we recommended the repeal of all mandatory legislation. The
first subdivision of this report analyzes in detail the mandatory
laws affecting the city. The other subdivisions of this report
summarize briefly the evidence adduced by the Committee con-
cerning some of the more conspicuous failures of the city admin-
istration to furnish to the citizens of New York an honest and
efficient government.
Respectfully submitted,
SCHUYLER M. MEYER,
Chairman.
THEODORE D. ROBINSON,
MAXWELL S. HARRIS,
FREDERICK W. KAVANAUGH,
SIMON L. ADLER,
SOL ULLMAN,
WALTER W. WESTALL,
JOHN R. YALE,
THEODORE STITT.
[187]
MANDATORY LEGISLATION AFFECTING THE CITY
OF NEW YORK
Appropriations Which Are Completely Mandatory.
A study of the effect of mandatory legislation upon the budget
for 1921 shows that of the $112,289,980.61 appropriated for per-
sonal service from the Tax Levy Budget of that year $59,502,-
062.80 or 52.9 per cent represented mandatory appropriations
which could not be increased or decreased by the budget makers,
either because the exact amount was fixed by law or because the
power of fixation was conferred upon officers other than the
budget makers. In this connection, however, it should be noted
that in many instances the budget makers have provided salaries
in excess of the mandatory rates.
A list of these mandatory positions is set forth in the attached
Exhibits 1, 2 and 4. These exhibits contain the citation of the
law which compelled each of the appropriations.
Prevalence of Mandatory County Legislation.
Mandatory legislation has concerned itself particularly with
fixation of county salaries. Of the $8,102,975.82 appropriated
for personal service in county offices for 1921 $6,226,532.27, or
76.8 per cent was mandatory as above defined (see Exhibits 1
and 2). The prevalence of mandatory county legislation may be
explained in part by the fact that the Mayor has no veto power
over bills affecting counties within the city of New York. It is
doubtless also due in part to the fact that county officials have no
representation upon the Board of Estimate. On the other hand,
the heads of so-called " city departments " and " borough depart-
ments " have such representation through either the Mayor, Comp-
troller or a Borough President and hence can more readily secure
appropriation which they desire.
Items Which Are Partly Mandatory.
It must not be assumed that the remaining 47.1 per cent of the
city budget for personal service or the remaining 23.2 per cent of
the appropriation for county salaries is entirely discretionary with
the budget makers. On the other hand there are certain classes
of appropriations which are partly mandatory, as follows : There
[189]
190 INVESTIGATION or AFFAIRS OF NEW YORK CITY
are those as to which any reasonable necessary expense incurred
must be paid irrespective of the amount appropriated. An example
of this type is the appropriation for fees and commissions for ex-
perts employed by the District Attorney; (2) There are those ap-
propriations where the rate of compensation is fixed by law but the
number of positions is discretionary, for example, surgeons in the
Police Department; (3) There are positions which are fixed by
law although the rate of pay for such positions is discretionary.
Examples of this type of mandatory legislation are too frequent
to require citation; (4) Finally, the maintenance of certain
bureaus or divisions is frequently required by law, although no
specific position or salary therein is required, for example, Charter
provisions specifying what bureaus shall be maintained in the
Finance Department.
1902 General Repeal of Mandatory Charter Provisions.
In 1902 by the enactment of Chapter 435 amending Section 56
of the Charter, the Board of Aldermen was given power " to fix
the salary of every officer or person whose compensation is paid out
of the city treasury " (with certain specific exceptions) " irre-
spective of the amount fixed by this act." This was in effect the
blanket repealer of all mandatory salary provisions in the charter
at that time. Thus the salary of the Mayor, fixed by Charter
Section 94 and the salary of the Corporation Counsel, fixed by
Charter Section 255, are both discretionary under Charter Sec-
tion 56. The section fixing the Mayor's salary and the section
fixing the Corporation Counsel's salary have both been amended
in other particulars since 1902. No change was made in the salary
rate however. The Corporation Counsel has held (see opinion
June 10, 1915) that so long as the rate was not changed it was the
intention of the legislature that the salaries should still be subject
to change by the Board of Aldermen under Section 56.
Ancient and Obscure Mandatory Statutes.
To re-enact today such a repealer as that of 1902 would be of
slight value for most mandatory statutes are not part of the Char-
ter. They are to be found in unconsolidated statutes, some dating
back as far as 1882, unrepealed sections of the Consolidation Act,
various chapters of the Consolidated Laws, the Codes of Civil
and Criminal Procedure, etc., etc. For example the new New
York City Court act contains no reference to specific salaries,
REPORT OF JOINT LEGISLATIVE COMMITTEE 191
except that the " salaries shall be fixed as prescribed by law."
There are, however, unrepealed provisions of the Consolidation
Act which compel certain salaries for interpreters and assistant
clerks and certain other statutes enacted in 1898 which fix the
salaries of stenographers and clerks in the city court (see Ex-
hibit 4).'
Blanket Repeal of Mandatory Legislation Recommended.
Legislation is recommended empowering the budget makers to
fix the number and compensation of all city and county positions,
with certain specific exceptions, irrespective of any general or
local law to the contrary. Two bills to accomplish this were intro-
duced in 1916 by Senator Brown (see Exhibit 3 and Exhibit 5).
One referred to city salaries and the other to county salaries. Each
provided for a referendum. The consensus of opinion against
mandatory legislation is apparently so general today as to obviate
the necessity of a referendum.
Exhibits 1 and 2 attached to this report list the laws which
compel particular county salaries and positions. Positions listed
in Exhibit 2 would not be affected by the bill introduced by Sen-
ator Brown in 1916, (Exhibit 3). Such a law would make
$5,389,025.44 of mandatory appropriations discretionary with
the budget makers and only $837.506.83 of county salaries would
still remain mandatory.
Exhibit 4 lists the laws which compel particular salaries and
positions in the city and borough departments. The items marked
with a star would not be affected by Senator Brown's bill of 1916
as finally amended (Senate Print No. 1734, Ex. 5). As the
large item of teachers' salaries would not be affected $50,647-
415.67 of city and borough mandatory salaries would remain man-
datory and only $2,628,114.86 of them would become discretionary.
EXHIBIT 1
Mandatory County Salaries.
The following table indicates Mandatory County Salaries
which would become discretionary if a bill similar to the one
attached, Exhibit 3 (Senate Int. 590, Print 622, 1916), were
enacted.
192 INVESTIGATION OF AFFAIRS OF XEW YORK CITY
COUNTY CLERK, NEW YORK COUNTY
Budget Mandatory
Position
rate rate Law
Counsel
$5,500 $5,000 1914, chap. 90
Clerk, Common Pleas and Super-
ior Court Records
3,250 2,500 1896, chap. 885
Clerk, Common Pleas and Super-
ior Court Records
3,000 2,500 1896, chap. 885
DISTRICT ATTORNEY, NEW YORK COUNTY
Budget Mandatory
Position
rate rate Law
Assistant district attorney
$12,000 $12,000 1920, chap. 822
6 Assistant district attorneys
7,500 7,500 1920, chap. 822
7 Assistant district attorneys
10,000 10,000 1920, chap. 822
Medical assistant
5,500 5,500 1915, chap. 355
Secretary
4,680 4,180 1918, chap. 652
Chief clerk
6,000 5,500 1918, chap. 652
Deputy chief clerk
4,350 3,850 1918, chap. 652
Deputy chief clerk and auditor .
4,350 4,350 1918, chap. 652
2 Clerks
3,250 2,750 1918, chap. 652
18 Clerks
2,880 2,250 1918, chap. 652
3 Clerks
2,400 2,400 1920, chap. 728
3 Clerks
2,400 2,400 1920, chap. 728
Clerk
2,400 2,400 1918, chap. 652
Law stenographer
3,250 2,750 1918, chap. 652
Chief law stenographer
2,874 2,178 1918, chap. 652
4 Law stenographers
2,299 1,716 1918, chap. 652
5 Law stenographers
2,200 1,650 1918, chap. 652
9 Law stenographers
1,982 1,452 1918, chap. 652
3 Law stenographers
1,830 1,320 1918, chap. 652
Engineering draftsman and pho-
tographer
2,220 1,650 1918, chap. 652
2 Telephone operators
1,449 990 1918, chap. 652
Chief process server
2, 904 2, 000 1912, chap. 191 and 1920,
chap. 822
14 Process servers
2,220 1,500 1912, chap. 191, and 1920,
chap. 822
7 Process servers
2,022 1,500 1912, chap. 191 and 1920,
chap. 822
12 Process servers
1,956 1,500 1912, chap. 191 and 1920,
chap. 822
16 Process servers
1 , 830 1 , 500 1912, chap. 191 and 1920,
chap. 822
Messenger
1,532 1,056 1918, chap. 652
2 Messengers
1,351 924 1918, chap. 652
4 Messengers
1,071 726 1918, chap. 652
3 Messengers
800 462 1918, chap. 652
Librarian
2, 500 1 , 100 1918, chap. 652
Clerk
3,250 2,750 1918, chap. 652
3 Clerks
2,904 2,200 1918, chap. 652
Stenographer
1,830 1,320 1918, chap. 652
2 Process servers
2,200 1,500 1912, chap. 191; 1920,
chap. 822
3 Process servers
2,022 1,500 1912, chap. 191; 1920,
chap. 822
Process server
1,956 1,500 1912, chap. 191, 1920;
chap. 822
6 Process servers
1,830 1,500 1912, chap. 191; 1920,
chap. 822
Messenger
800 462 1918, chap. 652
REPORT OF JOINT LEGISLATIVE COMMITTEE
193
COMMISSIONER OP RECORDS, NEW YORK COUNTY
NOTE. Laws of 1912, chap. 167, provide for a lump sum mandatory appropria-
tion of $100,000.
COMMISSIONER OP RECORDS, SURROGATE'S COURT, NEW YORK COUNTY
Budget Mandatory
Position rate rate Law
Commissioner ................ $7, 500 Same 1911, chap. 534
Deputy commissioner ......... 6,000 Same 1911, chap. 534
Superintendent ............... 5, 000 Same 1911, chap. 534
General clerk ................. 3, 500 Same 1911, chap. 534
Clerk ....................... 2,320 Same 1911, chap. 534
Chief recording clerk .......... 3, 000 Same 1911, chap. 534
7 Recording clerks .............. 2, 320 Same 1911, chap. 534
Recording clerk ............... 2, 100 Same 1911, chap. 534
6 Index clerks .................. 2,080 Same 1911, chap. 534
Index clerk .................. 2,080 Same 1911, chap. 534
Messenger ................... 2,080 Same 1911, chap. 534
2 Bookbinders ................. 2, 150 Same 1911, chap. 534
7 Laborers ..................... 1,464 Same 1911, chap. 534
COMMISSIONER OP JURORS, NEW YORK COUNTY
Budget Mandatory
Position rate rate Law
Commissioner ................ $6, 000 Same 1906, chap. 499
Assistant commissioner ........ 3,800 Same 1906, chap. 499
Secretary .................... 3, 800 Same 1906, chap. 499
Clerk ........................ 2,640 Same 1906, chap. 499
Clerk ........................ 2,400 Same 1906, chap. 499
2 Clerks, each .................. 2, 200 Same 1906, chap. 499
6 Clerks, each .................. 2, 076 Same 1906, chap. 499
9 Clerks, each .................. 1, 920 Same 1906, chap. 499
7 Messengers (as Notice Server),
each ...................... 1, 920 Same 1906, chap. 499
2 Messengers (as Notice Server),
each ...................... 1,823 Same 1906, chap. 499
2 Messengers, each ............. 1,920 Same 1906, chap. 499
PUBLIC ADMINISTRATOR, NEW YORK COUNTY
Budget Mandatory
Position rate rate Law
Public administrator .......... $10, 000 Same 1898, chap. 230, 31
Assistant public administrator. . 5,500 $5,000 1898, chap. 230, 31
SHERIFF, NEW YORK COUNTY
Position
Under sheriff
15 Deputy sheriffs
15 Assistant deputy sheriffs
Counsel
Assistant counsel
Chief clerk
Budget Mandatory
rate rate
$6,500 $6,000
Same
$1, 800
3, 500
2, 280
6,500
4,000
4,500
Law
1920, chap. 565
1920, chap. 565
1920, chap. 565
6,000 1920, chap. 565
3, 500 1920, chap. 565
4,500 1920, chap. 565
NEW YORK STATE GUARD AND NAVAL MILITIA, NEW YORK COUNTY
NOTE. Wages of all regular employees totaling $331,055 are mandatory under
Military Law. section 187 and following.
7
194 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
SUPREME COURT, FIRST DEPARTMENT. NEW YORK AND BRONX COUNTIES
NOTE. The salaries and wages for all officers and employees, except the justices,
total SI, 141, 600. All of these items are mandatory. Under various sections of the
Judiciary Law and Education Law, see particularly Judiciary Law, sections 274 and
362, and Education Law, sections 1163 and 1166.
SUPREME COURT, FIRST DEPARTMENT, MAINTENANCE OF APPELLATE DIVISION COURT
HOUSE, NEW YORK AND BRONX COUNTIES
NOTE. Under Laws 1900, chapter 490, the entire appropriation of $34,677 for
salaries of the custodian, engineers, cleaners and all other employees is mandatory.
COURT OF GENERAL SESSIONS, NEW YORK COUNTY
Position
Clerk
14 Deputy clerks
Assistant clerk
9 Record clerks
7 Clerks to judge
6 Stenographers
Crier
5 Interpreters
2 Warden, Grand Jury
53 Attendants
9 Attendants
2 Stenographers and typewriters. .
Special interpreters
Pensions . . .
Budget
Mandatory
rate
rate
$5,500
$5,000
4,500
3,000
4,500
3,000
3,500
3,000
4,500
4,500
5,040
5,040
3,600
3,600
3,500
3,000
2,400
2,400
2,500
2,500
2,100
2,100
3,000
3,000
240
240
3,000
3,000
Law
1911, chap. 526, 1531
1911, chap. 526, 1531
1911, chap. 526, 1531
1920, chap. 830
1920, chap. 316
1919, chap. 556
1918, chap. 590 and 591
1918, chap. 590 and 591
1918, chap. 590 and 591
1920, chap. 790
1918, chap. 648
1919, chap. 554
1921, chap. 482, 388
1918, chap. 645
SURROGATE'S COURT, NEW YORK COUNTY
Position
Chief clerk
Deputy chief clerk
Assistant deputy chief clerk. . . .
Law assistant : .
2 Law assistants
2 Law assistants
Clerk of court
Deputy clerk of court
Clerk, additional part of court. .
2 Clerks to the surrogate
2 Stenographers
Stenographer
Stenographer
Assistant stenographer
Stenographer
Confidential stenographer to the
surrogate
Stenographer to surrogate
Interpreter
Superintendent of supplies
Probate clerk
First assistant probate clerk ....
2 Confidential attendants to sur-
rogate
Second assistant probate clerk . .
Third assistant probate clerk. . .
Administration clerk
First assistant administration
clerk
Second assistant administration
lerk..
Budget
Mandatory
rate
rate
$11,000
Same
6,500
Same
4,500
Same
7,200
Same
7,000
Same
6,000
Same
6,000
Same
3,600
Same
3,600
Same
4,200
Same
4,500
Same
2,520
Same
1,830
Same
2,520
Same
1,708
Same
2,200
Same
2,200
Same
2,400
Same
3,180
Same
6,000
Same
3,180
Same
2,500
Same
2,200
Same
2,200
Same
4,500
Same
3,180
Same
2,520
Same
Law
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
1911, chap. 775
REPORT OF JOINT LEGISLATIVE COMMITTEE
195
Position
Budget Mandatory
rate rate
Law
Third assistant administration
clerk
2,220
Same
1911, chap. 775
Guardian clerk
3,000
Smae
1911, chap. 775
Assistant guardian clerk
2,520
Same
1911, chap. 775
Guardian accounting clerk
3,180
Same
1911, chap. 775
Assistant accounting guardian
clerk
2,220
Same
1911, chap. 775
Accounting clerk
3,600
Same
1911, chap. 775
Assistant accounting clerk
2,850
Same
1911, chap. 775
Certificate clerk
2,220
Same
1911, chap. 775
Subpoena clerk
1,830
Same
1911, chap. 775
Requisition clerk
1,830
Same
1911, chap. 775
Clerk
2,220
Same
1911, chap. 775
Special searcher
2,220
Same
1911, chap. 775
Correspondence searcher
2,220
Same
1911, chap. 775
Correspondence searcher
2,088
Same
1911, chap. 775
Clerk of records
2,700
Same
1920, chap. 702
5 Record clerks
2,220
Same
1911, chap. 775
Superintendent recording clerks.
2,700
Same
1911, chap. 775
Chief examiner
2,220
Same
1911, chap. 775
Assistant examiner
2,022
Same
1911, chap. 775
Recording clerk (photographic
recorder)
2,401
Same
1911, chap. 775
Recording clerk (assistant photo-
graphic recorder)
2,100
Same
1911, chap. 775
20 Recording clerks
1,830
Same
1911, chap. 775
Calendar clerk and superinten-
dent of copyists
2.220
Same
1911, chap. 775
2 Copyists
1,830
Same
1911, chap. 775
Librarian and chief messenger . .
2,820
Same
1911, chap. 775
3 Messengers
2,820
$2,100
1920, chap. 817, \
\34
6 Court attendants
2,500
2,100
1920, chap. 817, {
J3~
Attendant to chief clerk
2,160
2,160
1911, chap. 775
Laborer
1,445
1,445
1911, chap. 775
COUNTY CLERK, BRONX COUNTY
Budget Mandatory
Position
rate
rate
Law
Deputy county clerk
$4,500
$4,000
1913, chap. 825, |
13
Assistant deputy county clerk . .
3,500
3,000
1913, chap. 825,
3
Secretary
2,640
2,000
1913, chap. 825, j
|3
Counsel
3,500
3,000
1913, chap. 825, !
}3
Chief clerk
3,250
2,500
1913, chap. 825, |
3
Cashier
3,250
2,500
1913, chap. 825, j
3
Notarial clerk
3,250
2,500
1913, chap. 825, j
3
Equity clerk
3,500
3,000
1913, chap. 825, j
J3
DISTRICT ATTORNEY, BRONX COUNTY
Position
5 Assistant district attorneys
3 Assistant district attorneys
Deputy ass stant district attor-
ney
Secretary
Chief clerk
Clerk to Grand Jury
2 Confidential stenographers
Warden of Grand Jury
Interpreter
Messenger
8 County detectives
2 Process servers
Stenographer to Grand Jury. . . .
Mandatory
rate rate Law
$5,500 $5,000 1918, chap. 632
4,000 3,500 1918, chap. 632
2,880
3,500
4,000
2,040
2,400
2,040
2,040
2,040
2,040
2,040
3,000
2,880
3,000
3,500
1,500
1,800
1,500
1,500
1,500
1,500
1,500
2,000
1918, chap. 632
1918, chap. 632
1918, chap. 632
1918, chap. 632
1918, chap. 632
1918, chap. 632
1918, chap. 632
1918, chap. 632
1913, chap. 825,
1918, chap. 632
1918, chap. 632
3
196 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
REGISTER, BRONX COUNTY
Budget Mandatory
Position rate rate Law
Deputy register $4, 500 $4,000 1913, chap. 825, 3
Assistant deputy register 3,500 3,000 1913, chap. 825, 3
Land title examiner 4,000 2,000 1913, chap. 825, 3
Cashier 3, 250 2,500 1913, chap. 825, 3
Examiner 3,074 2,000 1913, chap. 825, 3
Secretary 3,074 2,000 1913, chap. 825, 3
Chief clerk 3,250 2,500 1913, chap. 825, 3
COMMISSIONER OF JURORS, BRONX COUNTY
Budget Mandatory
Postion rate rate Law
Commissioner $6,500 Same 1913, chap. 266, 8
Assistant commissioner 3,500 Same 1913, chap. 266, 8
Secretary 3,500 Same 1913, chap. 266, 8
Chief clerk 2,640 Same 1913, chap. 266, 8
Clerk 2, 160 Same 1913, chap. 266, 8
Clerk, stenographer and type-
writer 2,376 Same 1913, chap. 266, 8
3 Jury notice servers 1,848 Same 1913, chap. 266, 8
Messenger 920 Same 1913, chap. 266, 8
PUBLIC ADMINISTRATOR, BRONX COUNTY
Budget Mandatory
rate rate Law
Public administrator $4,500 $4,500 1913, chap. 825, 3
COMMISSIONER OF RECORDS, BRONX COUNTY
Budget Mandatory
Position rate rate Law
Commissioner $5, 500 $5, 000 1918, chap. 90
Deputy commissioner 4,000 4,000 1918, chap. 299
Superintendent 2,520 2,520 1918, chap. 299
Chief clerk 2,400 2,400 1918, chap. 299
Clerk 2,400 2,400 1918, chap. 299
3 Clerks 1,500 1,500 1918, chap. 299
2 Laborers 1,464 1,464 1918, chap. 299
Photographer 1, 825 1, 825 1918, chap. 299
Bookbinder 2, 150 2, 150 1918, chap. 299
Coypists (temporary) 6,000
SHERIFF, BRONX COUNTY
Budget Mandatory
Position rate rate Law
Under sheriff $5,500 $5,000 1913, chap. 825, 3
10 Deputy sheriffs 3, 500 3, 500 1920, chap. 738
5 Assistant deputy sheriffs 1 , 800 1 , 800 1920, chap. 738
Counsel 5,000 5,000 1920, chap. 738
Cashier 3,500 3,500 1920, chap. 738
Secretary 3,000 3,000 1920, chap. 738
Chief clerk 3,000 3,000 1920, chap. 738
NEW YORK STATE GUARD AND NAVAL MILITIA, OF BRONX COUNTY
NOTE. Wages of all regular empoyees, totaling $93,440, are mandatory under
Military Law, section 187, and following.
LAW LIBRARY, BRONX COUNTY
Budget Mandatory
rate rate Law
Librarian $2,340 $3,500 1921, chap. 635
REPOKT OF JOINT LEGISLATIVE COMMITTEE
197
SURROGATE'S COURT, BRONX COUNTY
Position
Chief clerk and clerk of the court
Probate clerk
Administration clerk
Cashier
Attendant and messenger
Budget
rate
$5,000
4,500
4,000
3,500
1,944
Mandatory
rate
Law
$5,000 1920, chap. 738
4,500 1920, chap. 738
4,000 1920, chap. 738
3,500 1920, chap. 738
1,944 1920, chap. 817,
COUNTY COURT, BRONX COUNTY
Position
County detective
County detective
Court stenographer
Court attendant
Court attendants
Interpreter
Interpreter (temporary)
Court stenographer (temporary)
Budget Mandatory
rate
rate
Law
$3,
000
$3,
000
1920,
chap.
779
3,
000
3,
000
1920,
chap.
779
4,
200
4,
000
1920,
chap.
818
2,
160
2,
160
1920,
chap.
816,
2,
500
2,
500
1920,
chap.
816,
2,
304
2,
304
1921,
chap.
639
200
200
1921,
chap.
482
2,
000
2,
000
1921,
chap.
4
COUNTY CLERK, KINGS COUNTY
Position
Deputy county clerk
Assistant deputy county clerk. .
Counsel
Secretary
Expert of records
Chief of old records
2 Assistant to chief of old records
Bookkeeper
Cashier
Law clerk
Notarial clerk
Clerk
Equity clerk in charge:
Equity clerk
2 Equity clerks
Docket clerk in charge
2 Docket clerks
Docket clerk
3 Index clerks
Stenographer
Document searcher
2 Comparers
Clerk
4 Clerks
Messenger
2 Custodians
Laborer
4 Copyists (temporary)
Budget Mandatory
rate rate
$6,000 $5,000
3,820 2,500
1921,
1921,
Law
chap. 586
chap. 586
4,
000 3,500
1921,
chap.
586
2,
400 1,500
1921,
chap.
586
3,
500 3,000
1921,
chap.
586
2,
040 1,100
1921,
chap.
586
2,
040 1,000
1921,
chap.
586
2,
851 2,000
1921,
chap.
586
2,
640 2,000
1921,
chap.
586
3,
320 2,500
1921,
chap.
586
3,
330 2,250
1921,
chap.
586
2,
640 2,000
1921,
chap.
586
2,
880 2,000
1921,
chap.
586
2,
880 2,000
1921,
chap.
586
2,
640 1,500
1921,
chap.
586
2,
640 2,000
1921,
chap.
586
2,'
640 1,500
1921,
chap.
586
2,
112
,500
1921,
chap.
586
2,
040
,500
1921,
chap.
586
1,
830
,200
1921,
chap.
586
2,
040
,200
1921,
chap. 586
2,
040
,000
1921,
chap.
586
2,
112
,200
1921,
chap.
586
1,
708
,200
1921,
chap.
586
1,
464
800
1921,
chap.
586
1
708
,000
1921,
chap.
586
1,
405
,000
1921,
chap.
586
2,
520 2, 160
1921,
chap.
586
DISTRICT ATTORNEY, KINGS COUNTY
Position
Assistant district attorney ....
3 Assistant district attorneys
Assistant district attorney ....
2 Assistant district attorneys
3 Assistant district attorneys
2 Assistant district attorneys
Budget Mandatory
rate rate Law
$10,000 Same 1920, chap. 864
9,000 Same 1920, chap. 864
8,400 Same 1920, chap. 864
7,500 Same 1920, chap. 864
6,000 Same 1920, chap. 864
7,500 Same 1920, chap. 864
348a
198 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
Budget
Mandatory
Position
rate
rate
Law
1
District (assistant) attorney
7,
500
Same
1920,
chap.
864
1
Assistant district attorney
6,
500
Same
1920,
chap.
864
Assistant district attorney
6,
000
Same
1920,
chap.
864
Chief clerk
5,
500
$5,000
1914,
chap.
468, (
?3
3
Clerks
2,
640
2,000
1914,
chap.
488, \
3
2
Clerks
2,
400
2,000
1914,
chap.
468, (
53
Clerk
2,
220
2,000
1914,
chap.
468, *
}3
Clerk
2,
160
2,000
1914,
chap.
468,
Stenographer and private secre-
tary
2,
520
2,000
1916,
chap.
187
5
Stenographers and private secre-
taries
2,
160
2,000
1916,
chap.
187
11
County detectives
2,
160
1,800
1911,
chap.
452,
55
County detective
2,
040
1,800
1911,
chap.
452,
Messenger
1,
708
1,200
1914,
chap.
468,
13
Attendant
I,
708
1,200
1914,
chap.
468,
3
REGISTER,
KINGS COUNTY
Budget
Mandatory
Position
rate
rate
Law
Deputy register
$5,
500
Same
1920,
chap.
823
Assistant deputy register and
deputy register
3,850
Same
1920,
chap.
823
Counsel .
3,
850
Same
1920,
chap.
823
Secretary
2,
400
Same
1920,
chap.
823
Expert of records
4,
070
Same
1920,
chap.
823
Land title examiner
3,
850
Same
1920,
chap.
823
Chief block index clerk
3,
300
Same
1920,
chap.
823
Chief searcher and examiner. . . .
3,
600
Same
1920,
chap.
823
Tickler clerk
3,
480
Same
1920,
chap.
823
Chief clerk of copyists
3,
410
Same
1920,
chap.
823
Notarial clerk
2,
640
Same
1920,
chap.
823
2
Examiners' assistants
2,
880
Same
1920,
chap.
823
First assistant tickler clerk
2,
616
Same
1920,
chap.
823
Chief current index clerk
2,
616
Same
1920,
chap.
823
Chief clerk of records
2,
616
Same
1920,
chap.
823
Bookkeeper
2,
880
Same
1920,
chap.
823
Executive clerk
2,
340
Same
1920,
chap.
823
Chattel mortgage clerk
2,
616
Same
1920,
chap.
823
Satisfaction clerk
2,
520
Same
1920,
chap.
823
2
Abstract clerks
2,
376
Same
1920,
chap.
823
Abstract clerk
2,
280
Same
1920,
chap.
823
Assistant cashier
2,
616
Same
1920,
chap.
823
Stenographer
2,
376
Same
1920,
chap.
823
Assistant index clerk
2,
376
Same
1920,
chap.
823
6
Assistant index clerks
2,
160
Same
1920,
chap.
823
Entry clerk
2,
376
Same
1920,
chap.
823
Mailing clerk
2,
160
Same
1920,
chap.
823
3
Comparers
2,
376
Same
1920,
chap.
823
Comparer
2,
376
Same
1920,
chap.
823
3
Assistant comparers
2,
376
Same
1920,
chap.
823
Assistant notarial clerk
2,
376
Same
1920.
chap.
823
Assistant notarial clerk
2,
160
. Same
1920,
chap.
823
Deliverv clerk
2,
232
Same
1920,
chap.
823
Second assistant tickler clerk. . .
j
980
Same
1920,
chap.
823
Second assistant tickler clerk. . .
944
Same
1920,
chap.
823
Assistant chattel mortgage clerk
i
980
Same
1920,
chap.
823
3
Clerks
2,
088
Same
1920,
chap.
823
6
Clerks
>
980
Same
1920,
chap.
823
Clerk
}
944
Same
1920,
chap.
823
2
Clerks
7
920
Same
1920,
chap.
823
REPORT OF JOINT LEGISLATIVE COMMITTEE
199
Budget Mandatory
Position
rate rate Law
5 Clerks
1,800 Same 1920, chap. 823
8 Clerks
1,794 Same 1920, chap. 823
Clerk
1,560 Same 1920, chap. 823
27 Copyists
1,872 Same 1920, chap. 823
2 Copyists
1,794 Same 1920, chap. 823
2 Copyists
1,680 Same 1920, chap. 823
Copyist
1,560 Same 1920, chap. 823
Copyist
1,512 Same 1920, chap. 823
2 Copyists
1,440 Same 1920, chap. 823
2 Custodians
1,711.00 Same 1920, chap. 823
Custodian
1,656 Same 1920, chap. 823
2 Custodians
1,440 Same 1920, chap. 823
Telephone operator
1,680 Same 1290, chap. 823
7 Messengers
1,440 Same 1920, chap. 823
Messenger
1,296 Same 1920, chap. 823
Keeper of coat room
1,422 Same 1920, chap 823
COMMISSIONER
OF RECORDS, KINGS COUNTY
Budget Mandatory
Position
rate rate Law
Commissioner
$5,000 Same 1920, chap. 821
Deputy commissioner
4,000 Same 1920, chap. 821
Superintendent
3,000 Same 1920, chap. 821
Assistant superintendent
3,000 Same 1920, chap. 821
Secretary
2,000 Same 1920, chap. 821
Chief clerk
3,162.50 Same 1920, chap. 821
Stenographer
1,955 Same 1920, chap. 821
Stenographer
1,800 Same 1920, chap. 821
Supervisor of copying
2,530 Same 1920, chap. 821
Chief of division
2,530 Same 1920 chap. 821
4 Chiefs of division
2,300 Same 1920, chap. 821
Chief clerk old records
2,300 Same 1920, chap. 821
Assistant chief of division
2,185 Same 1920, chap. 821
Assistant chief of division
1,840 Same 1920, chap. 821
3 Clerks
2,070 Same 1920, chap. 821
2 Clerks
1,955 Same 1920, chap. 821
Clerk
1,868.75 Same 1920, chap. 821
4 Cerks
1,840 Same 1920, chap. 821
3 Clerks
1,800 Same 1290, chap. 821
2 Draftsmen
1,800 Same 1920, chap. 821
Clerk:
1,740 Same 1920, chap. 821
2 Clerks
1,680 Same 1920, chap. 821
Clerk
1,650 Same 1920, chap. 821
4 Clerks
1,560 Same 1920 chap. 821
4 Clerks
1,470 Same 1920, chap. 821
Foreman of bindery
2,300 Same 1920, chap. 821
4 Bookbinders
1,620 Same 1920, chap. 821
Custodian
1,800 Same 1920, chap. 821
Custodian
1,200 Same 1920. chap. 821
6 Laborers
1,500 Same 1920, chap. 821
COMMISSIONER
OF JURORS, KINGS COUNTY
Budget Mandatory
Position
rate rate Law
Commissioner
$6,000 Same 1921 chap. 412;
chap. 628
Deputy commissioner
4,000 Same 1921, chap. 640
Secretary
3,250 Same 1921, chap. 640
Clerk
2,772 Same 1921, chap. 640
Fine and exempt clerk
2,520 Same 1921, chap. 640
7 Clerks
2, 160 Same 1921, chap. 640
9 Jury notice servers
1,823 Same 1921, chap. 640
Stenographer
1,464 Same 1921, chap. 640
1911,
200 INVESTIGATION OF AFFAIRS OF
YORK CITY
SHERIFF, KINGS COUNTY
Position
Under sheriff
8 Deputy sheriffs
8 Assistant deputy sheriffs
Counsel
Chief clerk
Assistant clerk
Equity clerk
Assistant equity clerk
Secretary
Accountant
Confidential stenographer
Telephone operator
Warden
Deputy warden
Bookkeeper
8 Keepers
3 Matrons
2 Cleaners
2 Cooks
NEW YORK STATE GUARD AND NAVAL MILITIA, KINGS COUNTY
NOTE. Wages of all regular employees totaling $259,770 are mandatory under
Military Law, section 187, and following.
SUPREME COURT, SECOND DEPARTMENT, KINGS COUNTY
Budget
Mandatory
rate
rate
Law
$6,500
$6,000
1901, chap. 705
2,904
2,200
1901, chap. 705
2,040
1,500
1918, chap. 647
5,500
5,000
1901, chap. 705
3,300
2,500
1901, chap. 705
2,760
2,000
1901, chap. 705
2,760
2,000
1901, chap. 705
2,520
1,800
1901, chap. 705
2,040
1,500
1901, chap. 705
2,160
1,500
1901, chap. 705
1,823
Same
1901, chap. 705
1,464
Same
1901, chap. 705
3,500
3,000
1901, chap. 705
2,640
2,000
1901, chap. 705
2,040
1,500
1901, chap. 705
1,708
1,200
1901, chap. 705
1,464
1,000
1901, chap. 705
1,100
750
1901, chap. 705
600
300
1901, chap. 705
Position
General clerk
Assistant general clerk
Consultation and opinion clerk.
4 Clerks
8 Clerks
5 Clerks
8 Clerks
11 Clerks to justices
12 Stenographers
Confidential attendant
39 Attendants
4 Attendants
5 Interpreters
2 Typewriter operators
Budget Mandatory
rate rate
$5,000 Same
4,500
7,000
4,250
3,750
3,250
2,750
4,000
4,200
3,500
2,500
2,000
3,300
2,500
Same
Same
Same
Same
Same
Same
Same
Same
Same
Same
Same
Same
Same
Law
1921, Chap. 246,
1921, Chap. 246,
1921, Chap. 246,
1921, Chap. 246,
1921, Chap. 246,
1921, Chap. 246,
1921, Chap. 246,
1921, Chap. 246,
1921, Chap. 246,
1921, Chap. 246,
1921, Chap. 246,
1921, Chap. 246,
1921, Chap. 246,
168.
168.
168.
168.
168.
168.
168.
168.
168.
168.
168.
168.
168.
1921, Chap. 246, 168.
SUPREME COURT, SECOND DEPARTMENT, APP. Div., KINGS COUNTY
Position
Deputy clerk 1
2 Confidential clerks f
Case and consultation clerk f
Attendants J
Confidential clerks to justices. .
Budget Mandatory
rate rate
Law
$28,522.69 See laws cited in 1921
budget, page 276.
$16,719.60 See laws cited in 1921
budget, page 276.
SURROGATE'S COURT, KINGS COUNTY
Position
Law assistant
Chief clerk and clerk of court .
Mandatory
rate rate
$4,000 Same
9,000 Same
Law
Code Civil Procedure.
2492 and 2493, Surro-
gate court Act, 22.
REPORT OF JOINT LEGISLATIVE COMMITTEE
201
Position
Accounting clerk.
Assistant accounting clerk
Probate clerk
Assistant probate clerk
Administration clerk
Assistant administration clerk . .
Certificate and financial clerk.. .
Guardian accounting clerk
Calendar clerk
Index clerk . .
5 Recording clerks
2 Clerks
5 Clerks
Stenographer
Stenographer
Typewriter copyist
Comparer
Chief of records and interpreter.
Assistant chief of records
Chief custodian*
2 Custodians
Chief court attendant . .
Budget
rate
Mandatory
rate
6,500
Same
3,000
Same
6,000
Same
3,500
Same
3,500
Same
3,500
Same
5,000
Same
5,500
Same
4,000
Same
3,250
Same
2,160
Same
2,400
Same
2,280
Same
3,000
Same
2,160
Same
2,160
Same
2,160
Same
4,000
Same
2,040
Same
2,160
Same
2,160
Same
3,000
Same
Law
2492 and 2493, Surro-
gate court Act, 22.
2492 and 2493, Surro-
gate court Act, 22.
2492 and 2493, Surro-
gate court Act, 22.
2492 and 2493, Surro-
gate court Act, 22.
2492 and 2493, Surro-
gate court Act, 22.
Code Civ. Proc., 2492,
2493 and Surrogate
Act, Sec. 22....
Code Civ. Proc., 2492,
2493 and Surrogate
Act, 22.
Code Civ. Proc., 2492,
2493 and Surrogate
Act, 22.
Code Civ. Proc., 2492,
2493 and Surrogate
Act, 22.
Code Civ. Proc., 2492,
2493 and Surrogate
Act, 22.
Code Civ. Proc., 2492,
2493 and Surrogate
Act, 22.
Code Civ. Proc., 2492,
2493 and Surrogate
Act, 22.
Code Civ. Proc., 2492,
2493 and Surrogate
Act, 22.
Code Civ. Proc., 2492,
2493 and Surrogate
Act, 22.
Code Civ. Proc., 2492,
2493 and Surrogate
Act, 22,
Code Civ. Proc., 2492,
2493 and Surrogate
Act, 22.
Code Civ. Proc., 2492,
2493 and Surrogate
Act, 22.
Code Civ. Proc., 2492,
2493 and Surrogate
Act, 22.
Code Civ. Proc., 2492,
2493 and Surrogate
Act, 22.
Code Civ. Proc., 2492,
2493 and Surrogate
Act, 22.
Code Civ. Proc., 2492,
2493 and Surrogate
Act, 22.
Code Civ. Proc., 2492,
2493 and Surrogate
Act, 22.
202 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
Budget Mandatory
Position
rate rate
Law
3 Court officers
2,500 Same
Code Civ. Proc., 2492,
2493 and Surrogate
Act, 22.
Telephone operator
1,600 Same
Code Civ., Proc. 2492,
2493 and Surrogate
Act, 22.
Law assistant
6, 000 Same
Code Civil Proc., 2492,
2493 and Surrogate
Act, 22
Stenographer
3,000 Same
Code Civil Proc., 2492,
2493 and Surrogate
Act, 22
Clerk
2,500 Same
Code Civil Proc., 2492,
2493 and Surrogate
Act, 22
Stenographer
2,000 Same
Code Civil Proc., 2492,
2493 and Surrogate
Act, 22
Court officer
2,400 Same
Code Civil Proc., 2492,
2493 and Surrogate
Act, 22
2 Recording clerks
1,500 Same
Code Civil Proc., 2492,
2493 and Surrogate
Act, 22
4 Laborers, temporary totaling . .
5,776 Same
Code Civil Proc., 2492,
2493 and Surrogate
Act, 22.
COUNTY
COURT, KINGS COUNTY
Budget Mandatory
Position
rate rate
Law
Chief clerk
7, 500 Same
Judiciary Law, 195
and 284
Deputy chief clerk
5,500 Same
Judiciary Law, 195
and 284
5 Confidential clerks
3,250 2,750
1917, Chap. 808
2 Clerks
4,500 Same
Judiciary Law, 195
and 284
4 Clerks
4,300 Same
Judiciary Law, 195
and 284
2 Clerks
3,800 Same
Judiciary Law, 195
and 284
Clerk
3,700 Same
Judiciary Law, 195
and 284
6 Clerks
3,500 Same
Judiciary Law, 195
and 284
Clerk
2,520 Same
Judiciary Law, 195
and 284
Clerk
2, 160 Same
Judiciary Law, 195
and 284
5 Stenographers
5,000 Same
Judiciary Law, 197
and 310
Stenographer and typewriter . . .
2,520 Same
Judiciary Law, 195
and 284
Chief court attendant ........
3,800 Same
1920, Chap. 816, 352
Assistant chief court attendant
3,300 Same
1920, Chap. 816, 352
[9 Court attendants
2,500 Same
1920, Chap. 816, 352
3 Court attendants
2,400 Same
1920, Chap. 816, 352
Court attendant
2, 160 Same
1920, Chap. 816, 352
REPORT OF JOINT LEGISLATIVE COMMITTEE
203
Budget
Mandatory
Position
Rate
Rate
Law
3 Detectives
3,800
Same
Judiciary Law,
195
and 284
2 Detectives
2,640
Same
Judiciary Law,
195
and 284
Detective
2,400
Same
Judiciary Law,
195
and 284
Warden, grand jury
4,000
Same
Judiciary Law,
195
and 284
2 Interpreters
4,000
Same
Judiciary Law,
195
and 284
2 Interpreters
2,160
Same
Judiciary Law,
195
and 284
Chief probation officer (male) . . .
2,160
Same
Judiciary Law,
195
and 284
2 Probation officers (male)
2,160
Same
Judiciary Law,
195
and 284
2 Probation officers (female)
2,160
Same
Judiciary Law,
195
and 284
Telephone operator
1,464
Same
Judiciary Law,
195
and 284
Messenger
2,400
Same
Judiciary Law,
195
and 284
2 Laborers
1,449
Same
Judiciary Law,
and 284
195,
Female prison helper
1,464
Same
Judiciary Law,
195
and 284
Telephone operator
900
Same
Judiciary Law,
195
and 284
Stenographer
4,500
Same
Judiciary Law,
195
and 284
Stenographer, transcript fees
totaling $989.50
Code Crim. Proc.
456
THE SUPREME COURT LIBRARY IN THE BOROUGH OF BROOKLYN
Budget Mandatory
Position Rate Rate Law
Librarian $4, 800 Same Education Law,
Assistant librarian 3, 000 Same Education Law,
Clerk 2, 000 Same Education Law,
Assistant clerk 900 Same Education Law,
COUNTY CLERK, QUEENS COUNTY
Position
Deputy county clerk
Assistant deputy county clerk
Counsel to county clerk
Private secretary
Bookkeeper
Financial clerk
Deputy financial clerk
2 Assistant tickler clerks
Notarial clerk
Superintendent of block index.
Index clerk
2 Index clerks
Chief recording clerk
Assistant chief recording clerk .
Chattel mortgage clerk
Budget
Mandatory
Rate
Rate
$4,500
$4,500
3,900
3,000
3,500
3,000
2,700
1,500
2,112
1,500
3,250
2,500
3,000
2,000
2,064
1,500
2,520
1,800
3,140
3,000
2,400
1,800
2,160
1,500
2,808
1,800
2,040
1,500
2,064
1,500
Law
1912, chap. 540, 3
1912, chap. 540, 3
1912, chap. 540, 3
1912, chap. 540, 3
1912, chap. 540, 3
1912, chap. 540, 3
1912, chap. 540, 3
1912, chap. 540, 4
1912, chap. 540, 4
1912, chap. 540,
1914, chap. 434
1912, chap. 540, 4
1912, chap. 540, 4
1912, chap. 540, 4
1912, chap. 540, 4
1912, chap. 540, 4
4;
204 INVESTIGATION or AFFAIRS OF NEW YORK CITY
Budfel
Mandatory
Position
rate
rate '.-aw
Satisfaction clerk
2,280
1,500 1912, chap. 540, 4
2 Docket clerks
2,040
1,500 1912, chap. 540, 4
Naturalization clerk
2,040
1,500 1912, chap. 540, 4;
U. S. Stat. 1906, chap.
359, 13
Assistant*naturalization clerk. . .
1,708
1,200 1912, chap. 540, 4;
U. S. Stat. 1906, chap.
359, 13
Mailing"clerk
2,040
1,300 1912, chap. 540, 4
Clerk
1,830
1,500 1912, chap. 540, 4
Chief clerk of marriage license
> bureau
2,112
1,500 1912, chap. 540, 4
Assistant chief clerk of marriage
license bureau
1,756
1,200 1912, chap. 540, 4
General clerk
1,756
1,200 1912, chap. 540, 4
3|General clerks
1,708
1,200 1912, chap. 540, 4
Supervisor of copying mutilated
records
2,160
1,500 1912, chap. 540, 4
10 Copyists of mutilated records. . .
1,708
1,200 1912, chap. 540, 4
K Recording clerk, copyist
1,830
1,200 1912, chap. 540, 4
11 Recording clerks, copyists
1,708
1,200 1912, chap. 540, 4
4 Comparers
2,112
1,500 1912, chap. 540, 4
Searcher
2,880
2,000 1912, chap. 540, 4
Map draftsman
2,040
1,200 1912, chap. 540, 4
Stenographer
1,830
1,200 1912, chap. 540, 4
Record clerk and custodian ....
1,561
1,000 1912, chap. 540, 4
Custodian
1,464
1,000 1912, chap. 540, 4
Bank messenger and clerk
1,464
1,000 1912, chap. 540, 4
Messenger and clerk
1,449
800 1912, chap. 540, 4
Messenger
1,439
800 1912, chap. 540, 4
DISTRICT ATTORNEY, QUEENS COUNTY
Budget
Mandatory
Position
Rate
Rate Law
Assistant district attorney
$4,500
$7,500 1921, chap. 161
3f Assistant district attorneys
3,500
6,500 1921, chap. 161
2JDeputy assistant district at-
torneys
2,772
5,000 1921, chap. 161
Chief clerk
3,140
4,000 1921, chap. 161
Legal examiner
3,074
4,500 1921, chap. 161
Clerk
2,088
2,750 1921, chap. 161
Clerk (bail clerk)
1,200
2,500 1921, chap. 161
Clerk
824
1,800 1921, chap. 161
Stenographer
2,376
2,400 1921, chap. 161
Stenographer
2,400 1921, chap. 161
Stenographer to grand jury ....
1,464
1,464 1921, chap. 161
Stenographer to grand jury
1,464 1921, chap. 161
County detective
"l,'944
2,100 1921, chap. 161
Investigator
2,160
2,400 1921, chao. 161
4 County detectives
1,823
2,000 1921, chap. 161
County detective
1,683
1,683 1921, chap. 161
Typist clerk
900
1,800 1921, chap. 161
Private secretary
3,000 1921, chap. 161
3 Process servers
1,500 1921, chap. 161
Phone operator
1,200 1921, chap. 161
Stenographer transcript fees
totaling $1.000
Code Grim. Proc. 952 V
REPORT OF JOINT LEGISLATIVE COMMITTEE
205
COMMISSIONER OP JURORS, QUEENS COUNTY
Position
Commissioner
Assistant commissioner. . .
Clerk
2 Clerks
Jury notice server
Stenographer
Budget Mandatory
Rate
$5,000
3,250
2,160
1,823
1,610
1,376
Rate
Same
Same
Same
Same
Same
Same
Law
1920, chap. 819
1921, chap. 640,
1921, chap. 640,
1921, chap. 640,
1921, chap. 640,
1921, chap. 640,
PUBLIC ADMINISTRATOR, QUEENS COUNTY
Position
Public administrator
Budget Mandatory
Rate Rate
$3, 500 Same
Law
1921, chap. 778
NEW YORK STATE GUARD AND NAVAL MILITIA, QUEENS COUNTY
NOTE. Wages of all regular employees totaling $7,300 are mandatory under
Military Law, section 187, and following.
SUPREME COURT, QUEENS COUNTY
Position
Budget Mandatory
Rate Rate
Law
$4, 250 Same
Judiciary Law,
3, 750 Same
Judiciary Law,
2,750 Same
Judiciary Law,
2,500 Same
Judiciary Law,
2,400 Same
Judiciary Law,
1,800 Same
Judiciary Law,
2, 500 Same
Judiciary Law,
2,500 Same
Judiciary Law,
2,400 Same
Judiciary Law,
Special deputy clerk
3 Special deputy clerks
3 Assistant special deputy clerks.
Chief court attendant
6 Court attendants
Court attendant
Court attendant
Interpreter
Interpreter
SUPREME COURT, SECOND DEPARTMENT, APPELLATE DIVISION, QUEENS COUNTY
Position
Deputy clerk
2 Confidential clerks
Case and consultation clerk . .
Attendants
Confidential clerks to justices.
Budget Mandatory
Rate Rate
$9,299 06
5,451 05
Law
See laws cited in 1921
budget, page 276
See laws cited in 1921
budget, page 276
COUNTY Coi
Position
Confidential clerk ....
JRT, QUEENS COUNTY
Budget Mandatory
rate rate
$3,250 $2,750
4,500 Same
3,350 Same
3, 100 Same
4,200 4,000
2,592 Same
2,500 Same
2,2?0 Same
2,700 Same
3,000 Same
Special deputy clerk
2 Assistant special deputy clerks..
Assistant special deputy clerk . .
Stenographer
Court crier
Chief court attendant
3j, Court attendants
Interpreter
2 Countv detectives . .
Law
1917, chap. 808
Judiciary Law, 287
Judiciary Law, 287
Judiciary Law, 287
1920, chap. 818
Judiciar} T Law,
Judiciary Law,
Judiciary Law,
Judiciary Law,
1920, chap. 779
206 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
DISTRICT ATTC
Position
Assistant district attorney
Assistant district attorney
Chief or confidential clerk
Grand jury stenographer.
>RNET, RICHMOND COUNTY
Budget Mandatory
rate rate Law
$3,500 Same 1920, caap. 795
3,500 Same 1920, chap. 795
2,500 Same 1920, chap. 795
2,000 Same 1920, chap. 795
1,500 Same 1920, chap. 795
1,800 Same 1920, chap. 795
1,500 Same 1920, chap. 795
2,500 Same 1920, chap. 795
Grand jury stenographer
Process server and clerk
Messenger
Assistant district attorney
COMMISSIONER OF JURORS, RICHMOND COUNTY
Budget Mandatory
Position rate rate Law
Commissioner ................ $2, 500 $1, 500 1S99, chap. 441
Assistant commissioner ........ 2, 160 2, 160 1921, chap. 640, 6
Clerk ........................ 2,160 2,160 1921, chap. 640, 6
NEW YORK STATE GUARD AND NAVAL MILITIA, RICHMOND COUNTY
NOTE. Wages of all regular employees totaling $13,505 are mandatory under
Military Law, section 187, and following.
SUPREME COURT, RICHMOND COUNTY
Budget Mandatory
Position rate rate Law
Special deputy clerk ........... $4,500 Same Judiciary Law, 168
Special deputy clerk ........... 4,250 Same Judiciary Law, 168
Clerk ........................ 3, 250 Same Judiciary Law, 168
Court attendant .............. 2, 600 Same Judiciary Law, 354
2 Court attendants ............. 2, 100 Same Judiciary Law, 354
Confidential clerks to justices. . 1,666.36 Same Judiciary Law, 160
and 279
SUPREME COURT, SECOND DEPARTMENT, APPELLATE DIVISION, RICHMOND COUNTY
Budget Mandatory
Position rate rate Law
Deputy clerk ............... )
2
*u> 02 ........
Attendants ................ ]
Confidential clerks to justices.. . 963 71 ........ See laws cited at page 290
of the 1921 budget
COUNTY COURT AND SURROGATE'S COURT, RICHMOND COUNTY
Budget Mandatory
Position rate rate Law
Court stenographer .............. $4, 200 $4, 000 1920, chap. 818.
SUPREME COURT LIBRARY, RICHMOND COUNTY
Budget Mandatory
Position rate rate Law
Librarian .................... $3, 000 Same Education Law, 1180-c
Assistant Librarian ........... 1,464 Same Education Law, 1180-c
Junior clerk .................. 900 Same Education Law, 1180-c
Grand total above mandatory fixations .......................... $5, 389,025.44
REPOET OF JOINT LEGISLATIVE COMMITTEE
207
EXHIBIT 2
Mandatory County Salaries.
The following is a list of the Mandatory County Salaries which
would not be affected by a bill similar to the one attached Exhibit
3 (Senate Int. 590, Print 622, 1916) because they pertain to
judicial or elective offices. It is interesting to note that the
salaries of the County Clerk of Richmond county and the Sheriff
of Queens County are, at present, discretionary although they are
also elective officers. Furthermore, the additional compensation
to the County Judges for services in drawing jurors, is discretion-
ary under Judiciary Law Section 26 although they are judicial
officers. It will be noted that the Commissioners of Jurors of
each county are listed in Table I, although in a later amendment
to Senate Int. 590 of 1916 Commissioners of Jurors were also
excepted from its operation.
NEW YORK COUNTY
Budget Mandatory
Position rate rate
County clerk $15, 000 Same
District attorney 15, 000 Same
Register 12,000 Same
Sheriff 12,000 Same
28 Justices of the Supreme Court,
first department, New York
and Bronx counties 7, 500 Same
7 Judges, court of general sessions 17,500 Same
2 Surrogates 15,000 Same
Law
1884, chap. 299
1920, chap. 822
1921, chap. 227, 2510
1920, chap. 565
Const., art. VI, 12
1911, chap. 526
1919, chap. 641
BRONX COUNTY
Budget Mandatory
Position rate
County clerk $10,000
District attorney
Register
Sheriff
Surrogate
County judge .
Visiting judge .
10,000
10,000
10,000
10,000
10,000
2,000
rate
Same
Same
Same
Same
Same
Same
Same
KINGS COUNTY
County clerk $12, 000
District attorney 15, 000
Register 12,000
Sheriff 15,000
14 Justices of Supreme Court,
second department
Justices designated to Appellate
Division from other districts..
Official referees at Appellate
Division 39,728 46
Official referees 2, 820 06
Surrogate 15,000 00
Same
Same
Same
Same
Law
1913, chap. 266,
1913, chap. 266,
1913, chap. 266,
1913, chap. 266,
1913, chap. 266,
1913, chap. 266,
1921, chap. 141
1911, chap. 641
1920, chap. 825
1911, chap. 780
1901, chap. 705
7, 500 Same Const., art. VI, 12
8,04211 Same Judiciary Law, 76
Same Judiciary Law, 116
Same 1913, chap. 724
Same 1919, chap. 641
208 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
QUEENS COUNTY
Budget
Mandatory
Position rate
rate
Law
County clerk $8,000 00
Same
1912, chap. 540
District attorney 12,000 00
Same
1912, chap. 161
Additional compensation to
justices of second department
residing outside Kings county. 39,519 64
Same
Const., art. VI, 12
Justices designated to Appellate
Division from other districts.. 2,621 91
Same
Judiciary Law, 76
Official referees to Appellate
Division 12, 952 40
Same
Judiciary Law, 116
Official referees 919 41
Same
1913, chap. 724
Surrogate 10, 000 00
Same
County Law, 232
County judge 10, 000 00
Same
County Law, 232
RICHMOND COUNTY
District attorney $15,000 00
Same
1915, chap. 408
Sheriff 6,000 00
Same
1916, chap. 83
Additional compensation to
justices residing outside Kings
county 6, 986 84
Same
Const., art. VI, 12
Judges designated to Appellate
Division from other districts. . 463 54
Same
Const., art. VI, 12
Official referees of Appellate
Division 2, 289 91
Same
Judiciary Law, 116
Official referee 162 55
Same
I -Lc/^JLj Cil&p. iOJ-
\ 1913, chap. 724
County judge and surrogate. ... 7, 500 00
Same
County Law, 232
Grand total above mandatory fixations ........................... $837,506.83
EXHIBIT 3.
STATE OF NEW YOEK.
No. 622 Int. 590.
IN SENATE,
FEBRUARY 21, 1916.
Introduced by Mr. Brown (for the committee) read twice
and ordered printed, and when printed to be committed to the
Committee on Affairs of Cities.
AN ACT
To -provide for submitting to the voters of the city of New York
the question; " Shall the expenses of County Offices of a
county included within the city, and the salaries and compen-
sation of all county officers and employees of any such county,
except judicial or elective officers, be fixed by the city author-
REPOKT OF JOINT LEGISLATIVE COMMITTEE 209
ities ; " and declaring the effect of an affirmative determi-
nation of such question.
The People of the State of New York, represented in Senate
and Assembly, do enact as follows:
Section 1. There shall be submitted to the voters of the city of
New York at the general election held in November, nineteen
hndred and seventeen, the question:
" Shall the expenses of county offices of a county included within
this city, and the salaries and compensation of all county officers
and employees of any such county, except judicial or elective
officers, be fixed by the city authorities ? "
If a majority of votes cast on such question at any election be
in the affirmative the power to fix and determine the expenses of
the county offices of any county included within the city, and the
amount and the times and manner of payment of the salary or
compensation of any county officers or employees of any such
county, except a judicial or elective officer and the term of office
and mode of appointment, number and grade of any appointive
county officer, and of the clerks, assistants or employees in any
county office, shall notwithstanding the provisions of any general,
special or local law, be vested in the city authority or authorities
which would have power, in the absence of statutory regulation, to
fix and determine such expenses, salaries, compensation or other
matters, if such offices, officers or employees were offices, officers
or employees of the city.
2. This act shall take effect immediately.
Amendments in later prints of this bill were as follows:
Amendment No. I.
except a judicial or elective officer, a commissioner of jurors, and
officers or employees of a Court of Record, or an assistant or
employee of a district attorney,
Amendment No. II.
judge or justices, an elective officer, a clerk of a court of record,
a commissioner of juror, a district attorney,
210 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
EXHIBIT 4.
MANDATORY SALARIES IN 1921 BUDGET
(EXCLUSIVE OF COUNTY POSITIONS)
BOARD OP ALDERMEN
Position Budget Mandatory Mandatory Law
rate rate total
Vice chairman $4, 000 $4, 000 $4, 000* Charter, 18
Chairman, finance com-
mittee 4, 000 4, 000 4, 000* Charter, 18
65 Aldermen. .' 3,000 2 ; 000 130,000* Charter, 18
BOARD or ELECTIONS
Position Budget Mandatory Mandatory Law
rate rate total
All 964,073 Election Laws 200, Char-
ter, 230
LICENSE DEPARTMENT
Position Budget Mandatory Mandatory Law
rate rate total
Commissioner 7,500 7,500 7,500 Charter, 640
BOROUGH PRESIDENTS
Position Budget Mandatory Mandatory Law
rate rate total
Five 10,000 10,000 50,000* Laws 1920, chap. 32,
Charter, 38
BOARD OF EDUCATION
Position Budget Mandatory Mandatory Law
rate rate total
49,912,415.67* Education Law 887, subd.
7, represents product
of mandatory 4.9 mill
tax
COLLEGE OF THE CITY OF NEW YORK
Position Budget Mandatory Mandatory Law
rate rate total
Total Personal ser-
vice 903,041.66 Laws 1918, chap. 583;
Charter, 1131
BROOKLYN INSTITUTE OF ARTS AND SCIENCES
Position Budget Mandatory Mandatory Law
rate rate total
20,000 Charter, 230; 624; Laws
1911, Chap. 696; Laws
1906, Chap. 618
POLICE DEPARTMENT
Position Budget Mandatory Mandatory
rate rate total Law
Chief surgeon .. $6,500 $3,500 $3,500 Charter, 299
Marine inspector 4,900 4,400 4,400 Laws 1920, Chap. 708; Charter,
276-C
Chief lineman . . 2, 400 1, 200 1, 200 Charter, 276-A
REPORT OF JOINT LEGISLATIVE COMMITTEE
211
2 Deputy Com-
missioners.. . .
Volunteer system:
Queens
Richmond. .
5,500
FIRE DEPARTMENT
5,000 10,039 Cia-ter, 720
15,400 15,400
10,800 10,800
15,400 Cha-ter, 722
10, 800 Charter, 722
Commissioner . .
Position
rate
rate
10 Justices
10 Stenographers . .
812,030
3,800
$12,030
3,000
1 Clerk
6,500
6,000
1 Deputy clerk. . .
4,500
3,000
1 Deputy Clerk . .
4,000
2,000
1 Deputy clerk...
3,560
2,000
2 Deputy clerks. .
3,074
2,000
12 Assistant clerks .
3,074
1,500
1 Assistant clerk..
2,616
1,500
7 Assistant clerks.
2,520
1,500
3 Interpreters
2,640
1,500
1 Chief attendant.
2,304
1,200
24 Attendants
2,160
1,200
1 Librarian
3,500
3,500
DEPARTMENT OF PLANT AND STRUCTURES
7,500 7,500 7,500 Laws 1916, Chap. 523
CITY COURT
Budget Mandatory Mandatory
total Law
120,003* La,v 1907, Chap. 707, 4
30,000 Law 1893, Chap. 651 and N. Y.
C. Court Aat 11
6,000 N. Y. C. Court Act 5; aTi'd
1921
3,000 Consol. Act. 1275 Am'd. 1894
and N. Y. C. Ct. Act. 5
2,000 Consol. Act. 1275 Am'd 1894
and N. Y. C. Ct. Act. 5
2,000 Consol. Act. 1275 Am'd. 1894
and N. Y. C. Ct. Act. 5
4,000 Consol. Act. 1275, Am'd 1894
and N. Y. C. Ct. Act, 5
18,000 Consol. Act. 1275, Am'd 1894
and N. Y. C. Ct. Act, 5
1,500 Consol. Act. 1275, Am'd. 1894
and N. Y. C. Ct. Act, 5
10,500 Consol. Act. 1275, Am'd. 1894
and N. Y. C. Ct. Act, 5
4,500 Consol. Act. 1275, City Ct.
Act, 12
1 , 200 Laws 1898, Chap. 172 and N.Y.
C. Ct. Act, 14
28, 800 Laws 1898, Chap. 172 and N. Y.
C. Ct. Act, 14
3,500 Laws 1921, Chap. 709; Salary
fixed by Trustees of Library
at not over $5,000
CITY MAGISTRATES COURT
Budget Mandatory Mandatory
Position rate rate
1 Chief magistrate 11,000 10,000
total Law
10, 000* Laws 1915, Chap. 531
Position
41 Justices. . .
6 Justices. . .
18 Clerks...
MUNICIPAL COURTS
Budget Mandatory Mandatory
rate rate
9,000 9,000
8,003
3,000
8,000
3,500
total Law
369,000* Laws 1920, Chap. 310
4S,000* Laws 1920, Chap. 310
54,030 Laws 1915, Chap. 279 and 581;
Charter 1373. All em-
ployees transferred " at their
present salaries."
6 Clerks 3,000 2,000 12,000 Laws 1915., Chap. 279 and 581;
Charter 1373. All em-
ployees transferred " at their
present salaries."
212 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
18 Deputy clerks. . .
3,500
3,000
54,000
Laws 1915, Chap. 279 and 581-
Charter 1373. All em-
ployees transferred " at their
present salaries."
6 Deputy clerks . .
3,000
2,000
12,000
Laws 1915, Chap. 279 and 581 ;
Charter 1373. All em-
ployees transferred " at their
present salaries."
42 Assistant clerks.
3,500
3,000
126,000
48 provided in budget but only
44 were transferred in 1915.
2 Assistant clerks.
3,500
2,000
4,000
48 provided in budget but only
44 were transferred in 1915
45 Stenographers. .
3,074
2,000
90,000
46 prov : ded for, only 45 trans-
ferred
9 Interpreters. . . .
2,232
1,500
12,500
46 provided for, only 45 trans-
ferred
12 Interpreter ....
2,160
1,500
18,000
46 provided for, only 45 trans-
ferred
1 Interpreter
2,088
1,500
1,500
46 provided for, only 45 trans-
ferred
1 Interpreter
2,040
1,500
1,500
40 Drovidcd for onlv 4^) trSiim
ferred
2 Interpreters. . . .
2,016
1,200
2,400
46 provided for, only 45 trans-
ferred
109 Attendants....
2,160
1,500
163,500
46 provided for, only 45 trans-
ferred
8 Attendants
1,944
1,500
12,000
46 provided for, only 45 trans-
ferred
1 Bookkeeper ....
2,376
2,000
2,000
46 provided for, only 45 trans-
ferred
1 Attendant to
Board of Jus-
tices
1,040
300
300
46 provided for, only 45 trans-
ferred
Grand total
$53 275 530 53
Total of starred
items. . .
50 647 415 67
Total unstarred
items . ...
$2 6?8 114 86
EXHIBIT 5.
STATE OF NEW YOKK.
3d Edg. 656. Nos. 626, 1487, 1557, 1734. Int. 59
IN SENATE,
FEBRUARY 21, 1916.
Introduced by Mr. Brown (for the ISTew York Committee)
read twice and ordered printed, and when printed to be com-
mitted to the Committee on Affairs of Cities reported favor-
ably from said Committee with amendments, and ordered
reprinted as amended, and committed to the Committee of the
Whole amended and ordered reprinted as amended and
EEPOBT OF JOINT LEGISLATIVE COMMITTEE 213
when printed to be recommitted to the Committee of the Whole
ordered to a third reading, amended and ordered reprinted
retaining its place in the order of third reading.
AN ACT
To provide for submitting to the voters of the city of New York
the question : " Shall the salaries or compensation of all city
or borough officers and employees, except the salaries of judi-
cial or elective officers and of members of the supervising or
teaching staff of the department of education, be fixed by
the local authorities ?" and declaring the effect of an affirma-
tive determination of such question.
Tlie People of fJie State of New York, represented in Senaie
<jnd Assembly, do enact as follows:
Section 1. There shall be submitted to the voters of the city
of New York at the general election held in November, nineteen
hundred and seventeen, the question : " Shall the salaries or com-
pensation of all city or borough officers and employees, except the
salaries of judicial or elective officers and of members of the super-
vising or teaching staff of the department of education, be fixed
by the local authorities ? " If a majority of the votes cast on such
question at such election be in the affirmative, the board of alder-
men of such city, upon the recommendation of the board of estimate
and apportionment, shall have the exclusive power to fix the
salary or compensation of every city or borough officer or employee
whose salary or compensation is paid wholly or partly out of the
city treasury, except the salary of a judge or justice or elective
officers and clerks of courts of record whose salary is fixed by
statute, and except the salaries of members of the supervising or
teaching staff of the department of education, notwithstanding the
provisions of any general, special or local law, and irrespective of
the amount of salary or compensation fixed by any such law, sub-
ject only to the limitations and conditions prescribed by statute
respecting the recommending or fixing of salaries or compensation
of appointive officers or employees by such boards.
2. This act shall take effect immediately.
214 INVESTIGATION OP AFFAIRS OF NEW YORK CITY
POLITICAL INTERFERENCE WITH POLICE ADMIN-
ISTRATION.
All experience has shown that a vital requirement for effective
and impartial enforcement of the law by the Police Department
is the complete freedom of that Department and its head, the Po-
lice Commissioner, from interference by the Mayor. The elective
head of the city government is necessarily subject from a variety
of quarters to pressure for special or privileged treatment. A
policeman desires to be promoted, or to be detailed to a " soft
berth/ 7 or to a precinct nearer his home. The proprietor of a
motion picture house believes that the police are unduly severe in
the enforcement of the law against the admission of minors.
A countless variety of similar situations arises every day. Pres-
sure upon the Mayor is continuous. If he succumbs and controls
the police commissioner in the disposition of such matters, the
police administration is bound to fail, for pull and influence, with
their attendant demoralization, have then been the governing
force in the department. Effective law enforcement is impossible
when the rank and file of the force or the public generally become
convinced that the Police Department is administered according
to personal or political "pull." That the Police Department un-
der Mayor Hylan and Commissioner Enright has been too much
subject to this demoralizing tendency is established by the evi-
dence before this Committee.
Mayor Hylan's first Police Commissioner was Frederick H.
Bugher, who did not seek the appointment and was not eager to
accept it.
On the Saturday preceding his appointment, in a conversa-
tion with Mayor-elect Hylan, Mr. Bugher stated that the Police
Commissioner could make a success of the department only if he
had an absolutely free hand and was not interfered with in any
way, that he must be permitted to select all of his deputy police
commissioners, make all promotions, assignments and appoint-
ments without any interference from the outside. Mr. Bugher
told the Mayor-elect that he feared the commissioner would be
interfered with by politicians and perhaps the incoming Mayor
himself. He suggested that whoever was appointed commissioner
be given six months in which to demonstrate whether he was cap-
able of running the department or not and if the Mayor was not
satisfied with the man he appointed, then, at the end of that time,
REPORT OF JOINT LEGISLATIVE COMMITTEE 215
he should remove him and put in someone else, but he should
not constantly interfere with him. Judge Hylan seemed to agree
that that was the way it ought to be done.
When the Mayor told Mr. Bugher that he was to be appointed,
Bugher urged him to think the matter over to see if he could not
get a man who would better suit him and said further, if he ac-
cepted the appointment it would only be on the conditions which
he had named to Mr. Hylan the previous Saturday. The Mayor
replied, " It is because you talk that way that's why I want
you for my commissioner."
Hylan recommends Solovei.
On January 2nd, the Mayor sent for Bugher and introduced
him to a Mr. Solovei. The Mayor said he (Solovei) would make
an excellent deputy commissioner and asked Mr. Bugher to ap-
point him and put him in charge of the Detective Bureau as sec-
ond deputy commissioner. Bugher told the Mayor that Solovei
was not the kind of a man, he wanted as one of the .deputies as
he had been counsel for one of the " pickpocket trusts." The
Mayor said, " Oh, he has represent-' 1 ' a few pickpockets and I
have known him a long time and he is a good lawyer.' 1 Bugher
said he did not feel like appointing him and the Mayor did not
press the matter further.
On January 3rd, the Mayor sent for Bugher and introduced
him to a lawyer, and asked Bugher to listen to the lawyer's com-
plaint. It was in reference to policemen being detailed to cer-
tain hotels. The lawyer represented some people who owned a
chain of hotels, in three of which uniformed policemen were sta-
tioned. The lawyer said he did not know why the policemen were
there and he named the location of one of the hotels and Bugher
told the Mayor, in the presence of the lawyer, that it had always
been a disreputable resort and he would remove the patrolmen only
after he had made a thorough investigation. After the lawyer
went out the Mayor said that the lawyer was a very prominent
man and probably as close to President Wilson as any man in the
United States.
The Mayor sent first-grade Detective O'Hara to Bugher with
instructions to appoint a certain individual as property clerk.
Bugher sent back word to the Mayor that there was no vacancy as
property clerk and that Bugher did not care for the man's ap-
pearance and would not have appointed him anyhow.
216 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
The second day that Bugher was in office, O'Hara came to aim
and handed him an envelope on which were written the names of
policemen that the Mayor wanted Bugher to transfer from one
post to another. Bugher told O'Hara to ask the Mayor to sneak
to him personally about the matter. The Mayor wrote Bugher a
letter requesting him to appoint Edwin J. O'Malley a deputy po-
lice commissioner.
About the second week Bughei was in office he appointed Mr.
Cambridge Livingston a deputy police commissioner. The
Mayor telephoned to Bugher that afternoon when he saw the ap-
pointment in the evening papers and scolded him for making the
appointment without consulting the Mayor. Bugher explained
that he understood he was to make all the appointments and he
selected Livingston because he would make a good trial deputy.
He was a lawyer. The next day the Mayor sent for him and
found fault with him again for appointing Mr. Livingston. His
principal grievance was that Livingston lived on Fifth Avenue.
One day when Bugher was at City Hall the Mayor said that he
wanted Bugher to reduce Dillon from the rank of Inspector to
that of Captain. He was then acting as Chief Inspector.
Bugher said that he thought it was unfair to reduce a man with-
out cause. Indeed, Bugher had had the twenty-two inspectors
before him on January 2nd, had told them he did not intend to
make any reductions but was going to give them a chance and if
they served loyally and faithfully they would remain inspectors.
The Mayor wrote Bugher a letter introducing Mr. Bert I.
Snyder of the Brooklyn Eagle as a friend of his of long stand-
ing and said that he wished to make an exception to his policy
against placing newspaper men in public office and to recommend
Snyder as a deputy police commissioner. Previously Bugher had
received a letter from the Mayor saying that he was " absolutely
opposed to newspaper men and politicians running the Police De-
partment." This was in connection with some reference he had
seen in the press to the effect that Bugher was considering news-
paper men for appointment, Bugher told the Mayor that he did
not think Snyder would be a suitable man for a deputy commis-
sioner. The Mayor asked why. Bugher said that he thought
" the crowd over there would lull him to sleep in about 48 hours.
He was a fine old gentleman."
The Mayor sent for Bugher in a great hurry one day. When
he arrived at the Mayor's office, the Mayor told him a patrolman
EEPOKT OF JOINT LEGISLATIVE COMMITTEE 217
had been fined five days' pay for drinking a cup of coffee
while on duty in Brooklyn. Bugher stated that this was
impossible as no police trials had been held up to that time during
Bugher 's administration. The Mayor insisted that it had been
done and Bugher should make a thorough investigation. Bugher
promised to do so and did, but no such thing had occurred.
During the twenty-three days Bugher was in office the Mayor
sent for him almost every day in reference to some such matter
or in reference to appointments, etc.
On January 22nd the Mayor sent for Bugher and handed him
a presentment handed up by the Extraordinary Grand Jury ap-
pointed in connection with the Ruth Cruger case. It referred to
nine motorcycle patrolmen who were indirectly connected with
that case and recommended that they either be dismissed or placed
on trial. Bugher stated that a copy had already been furnished
to him by the District Attorney. The Mayor asked him what he
was going to do about it. He said he was going to put them on
trial. The Mayor said they should be dismissed. Bugher said,
*' But we cannot dismiss them because, there is not sufficient evi-
dence to hold, that is, if we did dismiss them they will appeal to
the courts and be reinstated." Bugher had known three or four
of the men personally for ten or twelve years and believed them to
be absolutely honest and thought it would be an injustice to their
families to suspend them. He said, however, that he would give
them a fair trial. Bugher had already had a copy of the Grand
Jury minutes and studied them and had asked the District At-
torney to assign one of his assistants to prosecute these men in the
Police Department's trial court. After Bugher left the depart-
ment he read in the papers that these men had been suspended by
cider of the Mayor, but none of them was dismissed.
Following this conference and later on the same day, January
22nd, Bugher wrote the Mayor, requesting that he either be
permitted to run the department without interference or that the
Mayor accept his resignation. On the 23rd, the Mayor wrote
asking for his resignation, which Bugher submitted. The Mayor
has sought to make it appear that Mr. Bugher' s resignation was
compelled because of his failure to prosecute the motor cycle
policemen. It is clear, however, that Mr. Bugher' s further tenure
of his office was made impossible to any man of character and self-
respect, by reason of the Mayor's continuous and demoralizing
interference with the administration of the department.
218 INVESTIGATION OF AFFAIKS OF NEW YORK CITY
The Experiences of Deputy Commisisoner O'Grady.
Mrs. Ellen O'Grady was appointed Fifth Deputy Police Com-
missioner on January 28, 1918, and resigned on December 13,
1920. She had served as a probation officer in Judge Hylan's
court in East New York and was recommended to the Police Com-
missioner by Mayor Hylan. Commissioner Enright gave her no
instructions as to what her duties were to be, but her predecessor
had been doing welfare work on a small scale and she enlarged
it, taking up an investigation of dancehalls among other things.
After she had begun this investigation, Inspector McDonald was
sent by order of the Police Commissioner to take this investiga-
tion out of her hands. Thereafter nothing further was ever done,
so far as she could learn, to correct serious conditions in these
dancehalls. Her investigations were made in October and No-
vember and in December, 1919, further investigation was taken
from her. A few months later, owing to published criticisms,
Commissioner Enright sent her a memorandum instructing her to
investigate those dance halls. That was in April 1920. She
sent him in reply, a written memorandum calling attention to the
fact that a pretty thorough investigation had been started in No-
vember and December, 1919 by her and that she had secured suf-
ficient evidence to make arrests when Inspector McDonald called
at her office saying that the Commissioner had directed him to
handle the whole situation and she had given him all her data.
Some time prior to December, 1920, the mother of a girl of 17
complained to Mrs. O'Grady that her daughter was remaining
out nights and coming home with money that she had not earned.
Mrs. O'Grady assigned two policewomen to investigate the mat-
ter. They brought this girl and two others, one of whom was also
under 17, to Mrs. O'Grady's office. She questioned them care-
fully. They implicated two wealthy men. While in her office
she had the girls telephone to the office of one of these men, verify-
ing the fact that they were known to him. When she had thor-
oughly investigated the matter and had sufficient evidence she pre-
pared to make an arrest and sent her policewomen with two of the
girls, who were heavily veiled, to the office of one of the men.
This was a few days prior to December 23rd. After she had dis-
patched her policewomen on this mission and sometime later that
afternoon, Commissioner Enright sent for her and asked her about
the case and if she was sure that she was right in the matter. He
also asked if they were good girls. She replied by telling him
that the girls were under the age of 18 and that the men were
guilty of a crime. Shortly after she returned to her office from
REPORT OF JOINT LEGISLATIVE COMMITTEE 219
Commissioner Enright's office she received a series of telephone
calls from her policewomen. They stated that they had reached
the office of the man in question and had been told that he was in
and they would have to wait, and they had seen Ex-Inspector
Hughes and the Commissioner's secretary, Mr. Hackett come into
the office and that they had been moved from one room to 1 another
and had found it impossible to arrest the man. They did not say
that Hughes or Hackett ordered them not to arrest the man but
stated that by their words and actions they prevented the arrest.
Mrs. O'Grady determined to inform the Mayor about this and
did so on December 23rd, confirming it with a written memoran-
dum to the Mayor. She then sent the girls with the policewomen
to Chief Magistrate McAdoo to make their complaint to him.
Later, on December 23rd, after she had been to the Mayor's office
she received a note from Commissioner Enright as follows:
" Please make a thorough investigation and take proper police
action in connection with the Seaman case and promptly advise
me of the result." On December 26th, she wrote the Commis-
sioner a full statement to the effect that she had already investi-
gated the case and mentioned the interference of Ex-Inspector
Hughes and Secretary Hackett. From that time on there was a
series of petty persecutions which continued until her resignation.
It was this interference that ultimately led to Mrs. O'Grady's
resignation. She had been investigating conditions in motion pic-
ture houses for some time, particularly violations of morality, and
because she discovered the conditions were very bad, she finally
wrote a statement for the press telling of the danger of motion
picture houses, which later was published all over the country and
in Europe and much commended. The Police Commissioner was
offended by this and spoke to her about it, objecting because she
had not consulted him before giving the letter to the press.
Among other things, her investigation of motion picture houses
disclosed .the repeated violation of the law against admitting
minors. Then came the catastrophe in the Catherine Street mo-
tion picture house where six little children were killed. She
called her staff together and said that each of them should feel
guilty because they had not enforced the law strenuously enough.
This was on the morning of December 13, 1920. Later that day,
Captain Ammon of her staff came to her saying that he had been
in Commissioner Enright's office when Mr. Sidney Cohen, a mo-
tion picture exhibitor was there. Captain Ammon said, te Com-
missioner Enright told me to tell you that your people should not
be so strenuous around the motion picture houses, that when they
220 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
find a flagrant violation of law tell Mr. Cohen and he will see to
things or let the captain of the precinct know, but your people
are altogether too strenuous. 77 She then went into Commissioner
Enright's office, removed her badge, laid it on his desk saying,
" I am resigning" and left the room.
The Mayor's domination of Commissioner Enright in matters
of appointment to exempt positions and of transfers within the
department is shown by the following typical letters from the
Mayor's office to the Police Department:
From Assistant Secretary Sinnott, May 10, 1919.
" The Mayor has directed that I send you the following
names and addresses:
" Miss Elizabeth Helm, 473 Bainbridge Street, Brooklyn;
Miss Hortense Thompson, 40*3 Sackett Street, Brooklyn;
Miss Helen Burns, 588 Jefferson Avenue, Brooklyn; Miss
Lillian L. Lefler, 57 Graves Street, Brooklyn; Mrs. Ray BTic-
oletti, 2812 Second Avenue, New York; Cora J. Ahearn, 344
East 19th Street; Anna , 411 East 88th Street,
Manhattan; Mary Gowan, 3079 Decatur Avenue, Bronx."
All of these women were appointed as policewomen.
From Executive Secretary Kelly, January 23, 1920.
" The Mayor approves your request of January 20th for
permission to appoint to positions in the exempt class the
following-named persons :
" George McNulty, Secretary to the Second Deputy Com-
missioner, at $2400 per annum.
" Charles W. Hunt, Secretary to the Third Deputy Com-
missioner, at $2400 per annum.
" Carol Underbill, Stenographer to the Fourth Deputy
Commissioner, at $1550 per annum.
" William Gillespie, Secretary to the Police Commis-
sioner, at $4000 per annum.
" Henry W. Dearbrn, Confidential Investigator,' at $1920
per annum.
" Felix P. Nicklas, Secretary to the Department, at $3300
per annum."
From G rover Whalen, June IS, 1918.
" My dear Judge. Is it possible for you to approve the
application for the transfer from the Far Rockaway Pre-
cinct to Rockaway Beach of Patrolman Joseph Dwyer,.
REPORT OF JOINT LEGISLATIVE COMMITTEE 221
Shield No. 539 ? I understand that this request has already
been made through official channels."
The transfer was made June 21, 1918.
From Grover Whalen, May 10, 1918.
"Mr. John O'Neill, No. 4758 of the 40th Precinct Sta-
tion desires to be transferred to the Telegraph Bureau of
your Department. Anything that you may be able to do
for him will be very much appreciated by
" Very truly yours,
" Grover Whalen."
From, Grover Whalen, May 16, 1918.
" Some time ago I spoke to you about Patrolman O'Neill
of the 40th Precinct who is desirous of being transferred
to the Telegraph Bureau. Will you be good enough to ad-
vise me if it is possible to comply with the request. Thank-
ing you in advance * * *."
The transfer was made May 18, 1918.
From Grover \Vlialen, August 19, 1918.
" I send you a letter from John J. Doyle, 1 Kane Avenue,
Arverne, Long Island, regarding the transfer to Rockaway
of Patrolman Eldredge L. Warner, 22nd Precinct. If this
transfer can be made, I would appreciate it very much.
" Very truly yours,
" Grover A. Whalen, Sec't. to Mayor."
The transfer was made August 22, 1918.
From Grover Whalen, October 25, 1918.
" Is it possible to transfer Lieut. Deering, stationed in
Staten Island, (formerly connected with the Detective Bu-
reau) to Manhattan? Some of our good friends are in-
terested in the Lieutenant, and if you can consistently grant
my request, the same will be very much appreciated. Very
truly yours, Grover A. Whalen, Secretary to the Mayor."
Attached to this letter was a note:
"My dear Grover: Will you kindly keep the Lieut.
Deering matter in mind? Sincerely yours, Thos. J. Mc-
Manus, October 3, 1918."
The request was granted. Thos. J. McManus is " The ;?
McManus, well known as a former State Senator and Tammany
Leader.
222 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
ILLEGAL POLICE REINSTATEMENTS.
The evidence shows that twenty-nine police officers have, during
this administration, heen reinstated in violation of the established
law, which forbids reconsideration of applications for reinstate-
ment when such an application has once been considered and
denied. These officers are still retained on the force in spite of
findings by both the present Corporation Counsel and the present
Commissioner of Accounts that such reinstatements were illegal.
One officer was illegal 1 y reinstated merely so that he could be
retired on a pension.
Act of 1907.
The first statute providing for rehearing of charges on which
members of the police force had been dismissed and for reinstate-
ment was Chapter 723 of the Laws of 1907, which added Section
1543-a to the Charter. It did not permit rehearing in cases of
insubordination, conduct unbecoming an officer or member,
cowardice or intoxication.
Amendment of 1915.
This charter section was revised in 1915 so as to eliminate
these exceptions. Application by men previously dismissed or
demoted had to be made within one year after the passage of the
act. Those dismissed or demoted after the amending must apply
within one year after dismissal.
Abolition of Board of Review.
Shortly after this amendment of 1915, Mayor Mitchel created
a Board of Review consisting of the Police Commissioner, Fire
Commissioner and Corporation Counsel to advise him in relation
to applications under this amendment. On February 19, 1918,
the present Mayor's secretary wrote Corporation Counsel Burr,
" The Mayor does not expect to establish another Board of Review
for this purpose and these functions will be carried out by the
Police and Fire Commissioners.' 7 On January 12, 1918, Assist-
ant Corporation Counsel Nelson advised the Mayor that such a
board was without warrant of law, because not created by the
Charter.
Ordinance of July 2, 1918.
At a meeting of the Board of Aldermen on July 2, 1918, an
ordinance was passed purporting merely to transfer the provisions.
REPORT OF JOINT LEGISLATIVE COMMITTEE 223
of Charter Section 1543 a to the Code of Ordinances, but in fact
permitting applications thereunder to be made within a year after
the enactment of the ordinance instead of within a year after the
enactment of the statute. The Mayor approved this ordinance on
July 26, 1918, but it was thereafter held invalid by the Corpora-
tion Counsel, in an opinion rendered November 29, 1918.
Executive Board Created.
Thereafter an Executive Board in the Police Department was
created with a committee thereof known as the Laws and Regu-
lations Committee, to which such applications for rehearing were
referred.
Advisory Committee Appointed.
Under date of December 6, 1920, the Mayor wrote the Police
Commissioner referring to the Commissioner of Accounts' inves-
tigation of applications for reinstatement, and stating that the
Mayor had concluded to appoint an Advisory Committee to pass
upon these applications, consisting of the Corporation Counsel,
Fire Commissioner and Chief Inspector of the Police Department.
Following a public charge that numerous dismissed policemen
had been illegally reinstated, the Mayor directed the Commis-
sioner of Accounts to investigate.
The f( Functus Officio " Opinion.
On November 24, 1919, the Commissioner of Accounts
requested an opinion from the Corporation Counsel in the case
of Patrolman George F. Frey pointing out that Mayor Mitchel
had denied Frey's application for reinstatement, after which he
applied to Mayor Hylan for a rehearing and the Mayor consented
to a rehearing and Patrolman Frey had been reinstated. The
Commissioner of Accounts asked a ruling particularly upon
whether the denial by Mayor Mitchel made the matter "res
adjudicata," stating that this question would affect a number of
similar cases which the Commissioner of Accounts was exam-
ining. Under date of March 4, 1920, the Corporation Counsel
replied in part as follows : <{ I incline to the view that if a Mayor
denies an application of a uniformed member of either the Police
Department or the Fire Department for a rehearing, under the
provisions of Section 1543 a of the Charter, he is functus officio
and neither he nor his successor thereafter would have power to
reconsider such determination and grant the person concerned a
224 INVESTIGATION OF AFFAIRS OF NEW YOKK CITY
rehearing.' 7 In spite of this opinion Patrolman Frey is still a
member of the police force. That the Police Department had
knowledge of this opinion is shown by the fact that on May 31,
1920, the Secretary of the Department wrote former Patrolman
Frederick Blummert, referring to the Corporation Counsel's
opinion as reason for denying application for rehearing, stating
that the Police Commissioner was without jurisdiction, because a
previous rehearing had been granted and dismissal affirmed.
Illegal Reinstatements.
Of the 38 cases of reinstatement under this section of the
charter, 29 were illegal under the above opinion. Four of these
reinstatements took place after the opinion had been rendered.
Six others took place after a rehearing had once been granted
and dismissal affirmed. In nineteen of these cases reinstatement
was granted after rehearing had once been denied.
Reinstated after ff Functus Officio " Opinion.
These four cases are Joseph Calcaterra, Frank P. Mallon,
Edward J. Donne 1 ly and Thomas J. Coyne. Taking the Calca-
terra case as an example, it appears that he was dismissed on
December 7, 1915, for being intoxicated in a dormitory of the
Station-house and for discharging a revolver at a patrolman. On
August 2, 1916, he applied to Mayor Mitchel for a rehearing,
which was denied on November 21, 1916. On June 20, 1918,
he applied to Mayor Hylan for a rehearing. On November 13,
1919, the Police Commissioner wrote the Mayor recommending
a rehearing be granted. On January 5, 1920', the Commissioner
of Accounts wrote the Mayor stating that although application
was made to Mayor Mitchel " no action appears to have been
taken thereon" -this, in spite of the fact that a copy of the
letter of November 21, 1918, denying such application, was on
file in the Mayor's office, and had been delivered to the Commis-
sioner of Accounts to facilitate his study. Calcaterra was there-
upon granted a rehearing, was reinstated and is still a member
of the Police force.
Reinstatement after Dismissal Affirmed.
The six officers who have been reinstated in spite of the fact
that their previous rehearing affirmed the dismissal are John A.
DoTan, John P. Murtha, A. W. Bossard, J. E. Brady, Herman W.
Schieb and Sergeant Everett Lewis. The Dolan case may 'be
cited as an example of this class. Dolan was placed on trial on
REPORT OF JOINT LEGISLATIVE COMMITTEE 225
August 9, 1915, before Deputy Commissioner Godlej for con-
duct unbecoming an officer, neglect of duty and violations of the
rules. It was charged that he and another officer had endeavored
to extort payment of $25 from one McNavens under fear of
arrest and did actually obtain from him a $5 payment. He was
found guilty and dismissed and brought certiorari proceedings in
which his dismissal was affirmed. He applied to Mayor Mitchel
on July 27, 1916 for a rehearing. It was granted and the dis-
missal was confirmed upon such rehearing on December 20, 1917.
He applied again to Mayor Hylan for a rehearing. The Mayor
consented on October 23, 1918. The rehearing took place October
31, 1918 and on February 3, 1919 Dolan was reinstated.
Reinstatements After Rehearing Denied.
The nineteen officers who were reinstated before the " functus
officio " opinion, but after an application for a rehearing had been
denied, are John A. Kaht, A. J. Farley, Officer McGeraid, G. A.
Fortune, T. P. Madigan, Patrick McHugh, Hugh Gallagher,
Theodore Unger, James J. Sheehy, M. R. Reardon, W. J. Raleigh,
John Walsh, John Ryan, Thomas Dent, Francis J. Mang, Joseph
Storch, George F. Frey, J. F. McAuliffe and Charles L. Knch.
The case of Officer Kaht may be taken as an example in this class.
He was a sergeant, but on June 16, 1910 was reduced to the rank
of patrolman. A bill to permit the city authorities to rehear the
charges against him was passed, but vetoed by the Governor.
Kaht then brought certiorari proceedings which failed. He
applied to Mayor Mitchel on April 14, 1915, for a rehearing,
which was denied on July 14, 1916. After the special legislation
attempted in 1918 failed, he applied to Mayor Hylan for a rehear-
ing. On July 24, 1918, .the Mayor referred his application to
the Police Department. On March 21, 1919, the Police Commis-
sioner approved the recommendation for such rehearing. The
rehearing was held and Kaht was reinstated to the rank of
sergeant on July 9, 1919. He was then retired on January 26,
1921. In this case also the Commissioner of Accounts, in his
study in 1920, reported that "no action appears to have been
taken on this application" although a copy of letter of July 14,
1916, was on file in the Mayor's office and had been delivered to
the Commissioner of Accounts.
8
226 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
Maker Case.
The case of William F. Maher is remarkable because he was
reinstated as a Lieutenant on March 5, 1918, while he was em-
ployed as supervisor of the Property Protection Bureau of the
United Fruit Company, and was retired on March 27, 1918 on
a pension, receiving a salary from both sources from the 5th of
March to the 27th of March. He was thus reinstated merely that
he might be retired. He discharged no police duty in this interim,,
but was rendering service to a private corporation.
REPORT OF JOINT LEGISLATIVE COMMITTEE 227
DEMORALIZATION OF THE QUARTERMASTER'S
DIVISION.
The Committee's investigation of the Quartermaster's Division
of the Police Department has disclosed that the business side of
that department has been conducted wastefully and in flagrant
violation of the law requiring that public work and .supplies, cost-
ing in excess of $1,000, be furnished by contract and after com-
petitive bidding. Payroll costs have been increased. Members
and officers of the uniformed force have been placed in charge
of work for which civilians are better fitted. Purchases of more
than $1,000 have been split, for the purpose of avoiding compe-
tition and enabling awards to be made on open market order to
favored concerns. Prices paid were often extravagant. Compe-
tition was simulated by alleged " telephone bids," and in some
instances by forged bicls. It was disclosed, in addition, that the
private motor cars of favored individuals were maintained at
public expense and that stolen automobiles, recovered by the
police, were used for long periods, by persons other than their
owners, at public expense for gasoline and oil.
The evidence is as follows :
The Bureau of Repairs and Supplies now called the Quarter-
master Division of the Police Department had on January 1,
1914, a total of 32 employees on the administrative side at a
total annual cost of $50,500. Had the personnel of th^ Bureau
remained the same until January 1, 1918, an increase for respec-
tive grades during that time would have made the total salary
roll $4,000 more or $54,500. However, due mainly to a reorgani-
zation by which civilian employees were .substituted for members
of the uniform force, the personnel on January 1, 1918, was 33
employees at a total cost of only $49,500 on the administrative
side.
After 1918 due mainly to a reversion to the old custom of
employing members of the uniformed force in this bureau the cost
of operation steadily mounted each year. As of June 30, 1919,
there were 38 employees at an annual cost of $62,380. On Janu-
ary 1, 1920', there were 36 employees costing annually $66,160.
On Juno 30, 1920. there were 44 employees at a total annual pay-
roll of $83,190. On January 1, 1921, there were 37 incumbents
at a total annual cost of $85,983. Of the 37 employees on this
228 INVESTIGATION OF AFFAIRS OF NEW YOKK CITY
latter date twelve were civilians. There were one captain, two
lieutenants, one sergeant and 21 patrolmen.
This increase in cost is to be contrasted with Commissioner
Enright's promise to Mayor Hylan under date of March 27, 1918,
when he stated, " unless I am mistaken I will be able to save
one-half a million dollars from the budget of 1918 and I hope
to ask a substantial reduction in the budget of next year." The
budget for the Police Department for 1918 was $19,394,613.
The total expenditures for that year were $19,914,879. The
budget for 1919 instead of being lower as promised was $20,662,-
219 showing an increase of $1,300,000 over the budget of 1918.
On October 14, 1920, the Mayor's office wrote the Police Com-
missioner that on January 1, 1921, the purchase of equipment,
materials and supplies for the Police Department would be made
by the Board of Purchase and that therefore a list of names of
employees who would no longer be needed in the Police Depart-
ment and could be transferred to the Board of Purchase, should
be prepared. As a matter of fact only one person was so trans-
ferred and he was a bookkeeper at a salary of $1,800.
In 1918 there was a reversion to the previous system of having
a member of the uniformed force at the head of the Quarter-
master Division. The last member of the uniformed force to head
this division had been Lieutenant Enright. He was succeeded by
Purchasing Agent McDermott. By special order No. 71 in the
latter part of 1918, Lieutenant William T. Davis, who was then
Treasurer of the Lieutenants' Benevolent Association, of which
Lieutenant Enright was president, was transferred to the Bureau
of Repairs and Supplies. As no order had been issued counter-
manding Mr. McDermott' s authority there was a dual control
until the budget of 1919 took effect, in which the position of Pur-
chasing Agent was left unprovided. Lieutenant Davis has since
been superseded by the present head of the Quartermaster Divi-
sion, Captain Charles A. Zanes. The duties of the head of this
division are those of a business man. There is nothing in the ex-
amination for a position in the uniformed force which tests can-
didates' familiarity with such work as this. On the other hand,
the civil service examination for purchasing agent is a test of a
candidates' familiarity with supplies, methods of purchasing,
storing and accounting for supplies, etc., which knowledge would
be needed in administering such division.
REPORT OF JOINT LEGISLATIVE COMMITTEE 229
The budget for 1918 had provided for a civilian staff to take
care of auto repairing and auto machine work. Nevertheless,
members of the uniformed force were withdrawn from their duties
as policemen and assigned to this type of work and other work in
the Bureau of Repairs and Supplies. In 19 17 and 1918, only
two lieutenants and one acting sergeant and five patrolmen had
been assigned to this division, but there are now only 12 civilians,
there being one captain, two lieutenants, one sergeant and 21
patrolmen. A method of cost and control records has been abol-
ished. Civilian caretakers and stores foremen have been replaced
by members of the uniformed force.
The custom of receiving sealed bids for open market orders
has been done away with. Telephone bids are received on vari-
ous items of work. Charter Section 419 is continuously violated
in that requisitions for supplies in excess of $1,000 are split up
so as to be purchased on open market orders instead of by con-
tract as the law provides. Examples of the violation of this
charter provision, of the improper use of telephone bids and of
the purchase of supplies from favorite bidders without proper
competition, are described below.
For example, telephone bids were employed in the purchase of
nags for the Police Parade in 1919. Belts, sockets and shoulder
straps were needed with the flags, but in order to purchase the
goods on an open market order instead of a contract, two requi-
sitions were issued, one at a cost of $836.25 and the other $453.75.
making a total of $1.290. Both orders were awarded to the Eagle
Regalia Company. Although the parade wa,s held on May lYth
the order was not approved by the Deputy Commissioner until
May 23rd.
Similar violations were discovered in the ordering of printing
for the Police Department, Oberly & Newell, being in this case
the favorite bidder. Eor example, bids were requested for the
binding of copies of departmental regulations. Oberly & Newell
was by far the lowest bidder, but shortly after the order was issued
to them it was cancelled, an entry being made on the Police
Department records by Captain Davis to the effect that Oberly &
Newell had notified him that they would be unable to fill the order
at the price quoted. Thereafter bids were again solicited for the
same work. This time instead of bidding $398.50 as formerly,
Oberly Newell bid $926.70. They were still the low bidder
but this time none of the former bidders, except Oberly & Newell,
230 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
was asked to bid. Later evidence showed that the other bids
were not submitted in good faith and that they were not from
companies who are equipped to do this work.
The salesman for Oberly & Newell and the salesman for the
Warren Press, one of the apparent bidders in competition with
Oberly & Newell are brothers. The Warren Press never did a
job for the Police Department and could not do a large binding
job if they got it and would have to send it out to some other
concern. The Borland Printing Company which appears as an
apparent competitor with Oberly & Newell for this work could
not have done this type of work if they had received it and
would not under any circumstances bid against Oberly <fe Newell
for this work. The alleged bid was fictitious and unauthorized
nor was it made over the telephone. On several bids the name
of S. Weinstein of the Borland Printing Company appears. Wein-
stein testified that in no such instance was his alleged signature
genuine. He and his partner had a conference in reference to
the advisability of bidding for work for the Police Department
and had decided definitely that they could not do this as they
would he competing with Oberly & Newell from whom they
received much work.
In printing programs for the dedication of the John F. Hylan
Police Boat, the Warren Press is reported as having given a
telephone bid, although their representative testified that this
was not their custom and they could not have done this type of
work had they received it. Again the charter was violated by
splitting a requisition to avoid a contract and both times the
awards were made to Oberly & Newell.
A study of the prices when there was real competition as
against the prices charged the Police Department by Oberly &
Newell when there was only fictitious competition shows that
in the latter case the prices were very much higher. For ex-
ample, an order of letterheads, where there was real competition
cost at the rate of $4.36, whereas when Oberly & Newell secured
the order under fictitious competition for a similar order of let-
terheads the rate was $8.97. In another instance involving the
purchase of stationery the unit price when there was real com-
petition was $6.50 per thousand, whereas the price for the pur-
chase of similar supplies when awarded to Oberly & Newell
without genuine competition was $15.75, an increase of 125
per cent.
REPORT OF JOINT LEGISLATIVE COMMITTEE 231
The same situation was shown to exist in all branches of the
work of the Quartermaster Division, i. e., frequent violation of
Charter Section 419 by purchasing on open market orders when
the law required a contract, using telephone bids and award-
ing orders to favorite bidders at an exorbitant price without real
competition. Examples which show how general this practice
was throughout all branches of the work of the division are the
purchase of cork floors for the Trial Room at Police Headquart-
ers, purchase of ornamental iron partitions to be installed at
Police Headquarters, purchase of horses, repairs to police sta-
tion houses, plumbing and steam heating.
These violations in connection with the purchase of auto sup-
plies were so glaring as to require special mention. In the
first place it was shown that the motor equipment of the Police
Department was increased tremendously from 1 1918 to 1921. Tn
the semi-annual report of the Police Commissioner for the first
lialf of the year 1918 he represented to the Mayor that drastic
reductions in the department's motor equipment had been and
would be made. Under the heading of "Automobiles Discon-
tinued " appears this statement : " Seventeen automobiles were
dispensed with, a decrease of 38 per cent. The upkeep of these
machines would amount to $6,375. In the first six months, a
decrease of 38 per cent ;" and then under the heading, " Bicy-
cles and Motorcycles Discontinued " appears a further state-
ment, " On January 1, 1918, there were on hand 283 motor-
cycles and on June 30th, 277, a decrease of 6 per cent," How
untrue was this report and these promises is indicated by the
following summary of motor equipment purchased for the period
1918 to 1921, inclusive, by the Police Department:
40 Passenger automobiles at a cost of $48,075. 57
276 Motorcycles at a cost of 120,718.20
21 Patrol "wagons at a cost of 21,937.68
6 Motor trucks at a cost of 20,708.00
or a total expenditure for motor equipment during this period
of $211,439.45.
Of course, it took a vast amount of equipment, supplies, auto-
mobile tires-, oil, gasoline, etc., to maintain such a fleet of auto*-
mobiles and similar vehicles. During the administration of the
purchasing agent these supplies, wherever possible were purchased
on contract by public letting. Tires were bought that way with
very few exceptions. The practice of purchasing such supplies
232 INVESTIGATION OF AFFAIES OF NEW YORK CITY
on contract was deliberately discontinued during 1918 and 1919'.
In 1918, Mr. McDermott, who was then purchasing agent, pre-
pared a schedule showing the number of automobile tires that
would be required to operate the motor vehicles for the bal-
ance of 1918 and submitted this schedule to Lieut. William T.
Davis, who was then jointly in charge of the division with
Mr. McDermott. With this schedule the purchasing agent sub-
mitted a form of bid to be sent to a list of automobile supply
concerns. After several days this schedule was returned with
a slip attached to it bearing the entry, " Canceled, W. T. D."
This slip canceled a proposal for 185 tires of miscellaneous size
and a quantity of inner tubes which the Purchasing Agent pro-
posed to buy on contract, as required by the Charter and accord-
ing to the previous custom. Lieutenant Davis said that he was
simply carrying out the orders of the Commissioner, who did
not wish to enter into any contract for these supplies, but wanted
to continue buying from time to time " in order that they might
be friendly with the dealers." The concern from which most
of these supplies were purchased during 1918 to 1921 was the
Oriental Rubber and Supply Company in Brooklyn and an-
other concern known as the Ready Auto Supply Company. As
a result of this more expensive method of purchasing there was
included in the budget of 1919 for the Police Department,
$40,000 for motor vehicle supplies and $39,000 for motor ve-
hicle equipment. For tires alone, this meant an appropriation
of $25,000.
It had been the custom under the administration of the pur-
chasing agent to dispose of old equipment in part payment for
new, as permitted under section 1553 of the Charter. This cus-
tom also was terminated under the administration of Lieutenant
Davis.
The cars supplied with such equipment and maintenance on
January 1, 1921, listed as official cars belonging to the Police
Department or to the City of New York and maintained by the
Police Department, included, according to the records subpoenaed
from the department, 33 passenger automobiles. The former cus-
tom had been to purchase tires by contract according to standard
specifications which provided for a mileage guarantee. A study
made of purchases of tires from 1918 to 1921 indicated that while
the orders frequently called for a guarantee of five or six thou-
sand miles, there is nothing to show that the guarantees were
observed. Only 89 tire tags could be produced by the depart-
REPORT OF JOINT LEGISLATIVE COMMITTEE
233
ment for these years. These tags would show the car to which
the tire was issued and the mileage secured from that tire. The
officer in charge of the Quartermaster Division stated that they
were unable to find any more of the tags and in 1920 and 1921
the tags had been destroyed " as they did not think they were
of any further use." The purpose of keeping automobile tire
tags is, of course, so that a contractor can be required to make
good on the mileage that the tire has failed to give. Most of the
orders for tires for the Oriental Rubber & Supply Company
include a statement that the casings are to be guaranteed for
5,000 miles. There is no indication that any credit was ever allowed
for casings that failed to give this mileage. In one instance an
attempt was made to justify purchase of tires without requesting
any bids whatever by stating on the requisition " the reason why
bids are not had on these casings is as follows : The Oriental is the
only company of its kind that gives an unconditional guarantee
of 5,000 miles and this department never has any trouble with
these casings as to service, etc." This was false as the Pennsyl-
vania Rubber Company gives a 6,000 mile guarantee, the United
States Rubber Company, the Sterling Tire Company and others
give a, 5,000 mile guarantee.
Private Cars Maintained by Police Department.
The Police Department was requested to furnish a list of auto-
mobiles not owned by the City of New York which it main-
tained at Police Department expense. There are a total of 28
privately owned automobiles maintained by the Police Depart-
ment. The list is as follows:
Police
Make Number
Oldsmobile 50
Buick 49
Reo 51
Ford 52
Cadillac 66
Dodge 68
Chandler 70
Chevrolet 76
Overland 77
Buick 79
Ford 102
Ford 103
Buick 113
Pape 11,7
Liberty 118
Ford 119
Ford 61
Ford 101
Ford . ..120
Private Owner
Sgt. Gegan, Det. Bureau
Det. Riley
70 Pre. Capt. Northrup
Det. Kaufman 12 DD
Chaplain Coogan
Chaplain Ivie
Chaplain Brocken
Det. Grobau 14 DD
Det. Raeburn 14 DD
Capt. Mullarkey 14 DD
Det. Hayden
Det. Truck Squad
Inspector Belton
Spec. Dep. Com. Shaw
Spec. Dep. Com. Shaw
Det. Meyer 47 Prec. DB
Det. Caffrey 5 Prec. DB
Patrolman Confrey, 2 Insp. Dist.
Insp. 14th Dist.
} Gas ar.d
| Oils
234 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
Police
Make Number
Studebaker 67 Lieut. O'Brien
Packard 107 Underbill
Packard 108 Enright
Packard 109 Hylan personal } Equipment and
Oldsmobile 81 Deputy Faurot Maintenance
Dodge 114 Inspector Thor
Ford 55 Lieut. Park
Cadillac 78 Hylan-Sinnott, Private
It will be noted that some of them received complete equip-
ment and maintenance and others merely gasoline and oil as in-
dicated. It was not possible for the year 1|919 to secure com-
plete data as to the cost of this maintenance, due to the fact
that many of the records were not available. 'More complete
records could be obtained for 1920 showing that for seven cars
only out of the 28 their maintenance cost the city in 1920,
$11, 954.01. All of them received full maintenance consisting of
repairs, tires, gasoline and oil. Included in these private cars
maintained at city expense were the Mayor's private car (this
was later claimed to be an error made in the Police Department),
and also two cars belonging to one of the special or honorary-
deputy commissioners of the Police Department, Commissioner
Enright's private car, which was given to him by Deputy Com-
missioner Harriss was not only supplied at city expense with
maintenance and equipment but with a winter top " demountable
sedan, full doors at a cost of $865," which bill was paid by the
Police Department as was also a bill issued on an emergency
order form in favor of Wanamakers for four linen dusters, four
summer robes, three pair of goggles and one pair of field glasses
at a cost of $85, for the same automobila
Gasoline Issued for Stolen Cars.
The receipts which must be signed by members of the force
drawing gasoline and oil from departmental supply were sub
poenaed and examined for the years 1919 and 1920. Only a portion
of the receipts for these years could be found. In many instances
the receipt indicated that the gasoline or oil had been issued to
a stolen car which had been recovered by the department. These
receipts for 1919 and 1920 were segregated and approximated 250
in number, these being only a portion of receipts issued for
gasoline and oil for stolen cars during those years, as receipts for
only a few months were available. For the year 1919 a tabulation
of such receipts shows one Buick car receiving gasoline and oil
during five months, a total of 1,829 gallons of gasoline and 216
REPORT OF JOINT LEGISLATIVE COMMITTEE 235
quarts of oil signed for by a member of the force, stating that
the car was a stolen one which had been recovered. There was
also a Dodge car which received gasoline and oil in May, June,
August and September 1919, amounting to 156 gallons of gasoline
and 14 quarts of oil. A Packard car received gasoline and oil
in May and September in that year totaling 58 gallons of gasoline
and 9 quarts of oil. A similar record was made of the gasoline
and oil issued to the following cars: Hupmobile, Oldsmobile,
Cadillac, Ford, Hudson, Jordan, Chandler and Studebaker. The
total distribution of gasoline and oil to stolen cars during those
five months, May to September, being 4,060 gallons of gasoline
and 516 quarts of oil. On the basis of 30 cents a gallon for
gasoline and 14 cents per quart for oil the cost to the City of
New York for maintaining these cars during these months was
$1,218, for gasoline and $82.50 for oil. The department main-
tains depositories under the charge of the Property Clerk to which
these cars should have been immediately taken. There is one in
each borough and the gasoline to carry these cars to the point
of recovery in the City of New York to the Department Deposi-
tory would have been a very slight expense. The withdrawals of
gasoline and oil were particularly heavy, generally speaking, on
a Saturday or before a holiday.
236 INVESTIGATION OF AFFAIES OF NEW YORK CITY
1918 POLICE GAMES.
The 1918 police games were held August 24 and 31, 1918, for
the purpose of raising funds to defray the cost of uniforming
and equipping the volunteer police reserves organized to take
the place of regular members of the force who had been or would
be drafted for military service.
According to an official report, dated December 31, 1920, the
receipts on account of the 1918 games amounted to $384,615.04,
of which $374,012.04 was from the sale of tickets. According
to the records submitted to the Committee, no uniforms were
purchased until after the Armistice and as late as 1921 money
was still being spent to equip women members of the Police
Reserves.
Eunds collected from the public for patriotic and charitable
purposes, especially when collected by an official agency like the
Police Department, should be safeguarded in every way. The
Committee's investigation into the finances of the 1918 games dis-
closes a condition reflecting great discredit upon those officials of
the Police Department charged with the responsibility for the
distribution and sale of tickets.
This work was performed by a committee consisting of Deputy
Commissioner Frederick A. Wallis, Treasurer; Special Deputy
Commissioner Allan A. Ryan, Vice-Chairman ; Stephen A. Rudd,
Secretary; Vincent E. Einn, Assistant Secretary; Lieutenant
Charles A. Zanes, Assistant Secretary ; Patrolmen Clay, Bosch and
Crombholtz. The Committee's examination of these persons and
others disclosed the facts
1. That the original records covering the printing and
sale of tickets had been destroyed or lost.
2. Thnt a proper audit of receipts and ticket sales had
never been made.
3. That the loose manner in which cash was handled
offered every opportunity for loss through carelessness or
dishonesty.
Because of the destroyed or lost records, no exact information
has been obtainable as to the number of admission tickets printed.
It was stated that the Police Department files at one time con-
tained a memorandum showing the number of tickets printed, but
the memorandum was not produced. The nearest approach to an
REPORT OF JOINT LEGISLATIVE COMMITTEE 237
official record on this subject is a statement by Deputy Commis-
sioner Wallis, in a letter to Commissioner Enright, dated Septem-
ber 13, 1918, to the effect that 550,000 tickets had been donated.
Had all these tickets been sold and the proceeds deposited to the
credit of the fund, the sum of about $500,000 would have been
idealized, instead of the $374,000 reported on December 31, 1920.
Xo reliable information has been obtained moreover as to the
number of tickets sold. It was learned that bunches of tickets
were distributed to the precincts and issued for sale, and the
statement was made that a memorandum was kept at Police Head-
quarters on either a yellow pad or in a book, showing the tickets
thus distributed. Neither the yellow pad nor the book was pro-
duced for the Committee in response to its subpoena, nor has the
Committee been given any information as to the present where-
abouts of such alleged records.
So far as the Committee has been able to learn, no acceptable
evidence from the accounting standpoint exists as to the number
of tickets issued for sale or sold. In a statement which appears to
have been made by Deputy Commissioner Wallis at a meeting in
the Criterion Restaurant, on August 22, 1918, he is quoted as
saying that 500,000 tickets had already been sold. If this state-
ment was accurate, there is at least $125,000 unaccounted for by
the persons in charge of ticket sales, as in the last official report
of these games the proceeds from the sale of tickets are said to be
$374,012.04. The use of yellow pad memoranda for the control
of sales aggregating hundreds of thousands of dollars is inex-
cusable and invites fraud. The subsequent loss or destruction of
such original records is even more reprehensible. As a result, the
Committee has been unable to make a real audit of ticket sales.
The method of handling the money received from the sale of
tickets appears to have been equally loose and unbusinesslike. For
about two weeks these receipts were allowed to accumulate at Head-
quarters in the form of cash, and checks, being kept in an office
safe for security. The first bank deposit made was on August 21,
1918, and amounted to $105,367.40. An analysis of such records
as the Committee has been able to secure shows that according to
the daily Telegraph Bureau reports, the precincts had collected
approximately $105,000 before this deposit was made and that
the actual receipts at Headquarters from the precincts prior to
August 21st, aggregated more than $105,000. If contributions
were received at Headquarters from other sources than the pre-
238 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
cincts,. prior to the date of the first deposit, there is no record to
indicate what became of such contributions.
Prior to this initial deposit, however, one of the members of the
Police Fund Committee deposited $52,000 in cash in his personal
bank account in Brooklyn, acting, it was stated, on authorization
of Deputy Commissioner Wallis. The bank records indicate that
this money was subsequently transferred to the Police Fund
account, but the transaction was carried on in a most unbusiness-
like way.
The general handling of the funds was equally casual. Wit-
nesses testified that receipts were given to precincts for the funds
turned in by them and that a cash book was kept showing such
transactions in detail. The Police Department, however, has not
produced such cash book in response to our subpoena, and from
the testimony, it appears that this original record has been lost
or destroyed. One witness has testified that the now missing cash
book was in the possession of the Police Department as late as
February or March, 1921, but no information can be obtained as
to its present whereabouts.
The Committee has secured what is said to be a sort of copy of
this cash book, made up by a private accountant employed by
the Treasurer of the 1918 Fund. By the accountant's own admis-
sion, it is not an exact copy but he states it sets forth accurately the
amount of receipts and expenditures as appeared in the original
records submitted to him.
The Committee finds no good reason for the preparation of this
copied record. It is a valueless document from the point of view
of audit. The receipts entered therein balance with disbursements
and cash on hand, only after a reconciling entry is made. Even
then, there is not complete agreement with the figures as printed
in the official report dated December 31; 1920. The book con-
tains a good many erasures and alterations. Every item entered
as a receipt is entered as the year 1919, while as a matter of fact
practically every item was received in 1918. A comparison of
such precinct records as the Committee has been able to secure
shows discrepancies between the amounts entered in the cash book
as received, and the amounts entered on the official receipts issued
when the money was delivered at Headquarters. The Committee
has also found an entry in the cash book showing the receipt of a
contribution of $500 from the American Sugar Refining Com-
pany, whereas the Committee has obtained from the American
REPORT OF JOINT LEGISLATIVE COMMITTEE 239
Sugar Refining Company a cancelled check passed through the
Clearing House and paid, dated August 28, 1918, payable to the
order of Frederick A. Wallis, Deputy Police Commissioner, in the
sum of $1,000 ; thus demonstrating that in this instance at least
the copied cash book does not state exactly the actual receipts by
the Committee in charge of the 1918 games.
Page after page of items of cash receipts in the copied record
just referred to are undated. The loss or destruction of the orig-
inal cash book, the errors, alterations and insufficiency of the
copied cash book makes an exact audit of receipts absolutely
impossible.
This system, or lack of system of financial control, invites loss
from carelessness or dishonesty. From the evidence given before
the Committee, it appears that no adequate safeguards were estab-
lished. The Committee, while it has not developed evidence prov-
ing the dishonesty of any person or persons, is satisfied that there
was every opportunity for dishonesty and that the strange absence
of original records of tickets sold and cash received casts grave
suspicion on the Department.
It is also strange, and perhaps significant, that the Commis-
sioner of Accounts, in spite of his varied activities, never made a
real audit of the transactions arising out of the 1918 Police Games-
Such matters vitally concern the public. The present adminis-
tration has encouraged the use of the uniformed police force
in selling tickets for benefits. ' The police have raised about
$1,661,000 from the public since 1918. The Arch of Freedom
Fund drew in over $200,000. The reported receipts from the
sale of tickets for the 1918 games were $374,000. The 1919 games
brought in $318,000. In 1920, the receipts were $419,000, and
the 1921 games yielded about $350,000.
The use of the police force to raise money is highly improper.
The impropriety is enhanced when no adequate control is estab-
lished over the cash obtained from the public and where the pur-
pose for which the money is raised from the public is subject to
change after the receipt of the public's contributions. If the local
authorities cannot be trusted to adopt the necessary precautionary
measures, public interest requires the enactment of legislation
which will accomplish the desired end.
The Committee recommends the enactment of legislation pro-
hibiting the use of the uniformed forces of the police, fire and
street cleaning departments in soliciting funds for any purpose
whatsoever.
240 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
SPECULATION AND MONEY MAKING BY POLICE
OFFICIALS.
The Committee inquired into the profits which accrued tv>
present and former members of the Police Department, largely,
if not wholly, because of their official positions. It found thht
such persons had benefited materially from investments, from
business connections, from gifts and from real estate transactions.
For example :
Richard E. Enright.
On February 15, 1918, Commissioner Enright appointed Dr.
John A. Harriss a Special Deputy Commissioner. On March 4,
1918, seventeen days later, Dr. Harriss purchased a Packard
Twin-Six automobile from the Packard Motor Car Company, at
a cost of $4,622.40. The initials "E. E. E." were ordered placed
on that car, and the car was put at the disposal of Eichard E.
Enright. Commissioner Enright testified that the car had not
been given to him "yet," saying, "He would have given it to
me if I wanted it. I told him I would discuss that with him after
I got through with the office." In the meantime, the Commis-
sioner uses it as his own and the expense of maintaining it (in-
cluding the purchase of an eighty dollar pair of field glasses) is
borne by the City of New York, out of Police Department funds.
On April 15, 1918, Commissioner Enright appointed Allan A.
Kyan a Special Deputy Commissioner and on April 16, 1918, a
Stutz automobile was delivered to Commissioner Enright. This
car was paid for on April 16th by a cheque of Allan A. Eyan's
for $2,641.50. Commissioner Enright testified that this was a
gift to Mrs. Enright from Mr. Eyan, Mr. James H. Ward and,
he thought, others. Commissioner Enright was not married, how-
ever, until November, 1918.
In April, 1919, Commissioner Enright received a cheque for
$12,083.29 from Allan A. Eyan & Co., representing " profits r
on a transaction in Morton Petroleum stock. Commissioner
Enright put up no money himself, did not know when the stock
was purchased nor when it was sold. About four months after
a conversation with Eyan about possible stock speculation, he
received a report of the Morton Petroleum transaction and the
cheque.
REPORT OF JOINT LEGISLATIVE COMMITTEE 241
Edward P. Hughes.
Edward P. Hughes, a friend of Commissioner Enright's, re-
tired as police inspector February 15, 1918, for " physical dis-
ability " and organized a piivate detective agency. He received
contracts to police the piers of a number of steamship lines and
the testimony taken before the Committee showed that his close
relations with the Police Department were of material value to
him in getting and keeping business.
An examination of his various bank accounts, business, per-
sonal and joint with his wife showed deposits between January 1,
1918, and September 15, 1921, totaling over one million dollars,
as follows:
1918 1919 1920 1921
Detective service ... . $97,67882 $255,09005 $267,94577 $130,63100 Up to Septem-
ber 15.
E.P.Hughes 133,23822 112,94230 32,40443 Up to Septem-
ber 15.
Joint account 23,089 92 8,237 08 4,770 50 3,125 00 Up to Septem-
In addition, Hughes had a speculative account with Allan A.
Ryan & Co. This was opened in 1916, but showed dealings of
only $2,335.14 up to February 28, 1918. In 1918, however, the
total was $7,900, and in 1919 it was $105,000.
Domini ck Henry.
The financial transactions of Police Inspector Dominick Henry
were not so spectacular. His salary was $4,900 per annum and
his bank accounts showed deposits as follows:
1918 $10,184 04
1919 14,659 73
1920 9,095 00
1921 to September 7 242 30
Henry's account with Billings, Olcott & Winsmore also showed
the outright purchase of stocks as follows:
October, 1919 $10,552 95
November, 1919 35,825 00
May, 1920 21,615 69
The most significant fact established by the Committee with
respect to Inspector Henry's personal forturieb was that the
Xavigazione Generale Italiana, a steamship line leasing two
North River piers, donated $1,000 to Henry, the Inspector in
whose district the piers were located. The steamship company
242 INVESTIGATION OF AFFAIRS OF NEW YOKK CITY
had not been getting adequate protection, and in the course of a
conference at police headquarters to discuss this matter, Henry
suggested that an ex-police inspector named Cross be employed in
place of the Vachris detective agency, to furnish watchmen on
the piers. The change was made but the new arrangement cost
the steamship company twice as much as the old, exclusive of the
payments to Henry. These payments were explained by Francis
Gilbert, the attorney who made them, as having been made because
of sympathy for Henry who was under indictment at the time
for neglect of duty and who was very hard up because of the
expenses incident to his trial. The first " contribution " by the
Italian line to relieve Henry's poverty amounted to $500 and
was entered on their ledger under date of May 21, 1920, as
" Gratuity as per advice of Gilbert $500." On the same day,
namely, May 21, 1920, Henry paid $18,615.69 to the firm of
Billings, Olcott & Winsmore, which amount with the sum of
$3,000 paid the preceding day was the purchase price of stocks
bought by him and costing $21,615.69.
John F. Dwyer.
During the Committee's investigation of the financial opera-
tions of high officials in the Police Department, it learned of the
purchase by Inspector John F. Dwyer of an apartment house,
through the office of Warren Leslie, an attorney. The Committee
accordingly made a careful inquiry into the facts and into the
relations of Leslie and Dwyer, and found:
1. That, in 1920, Leslie arranged for the purchase by
Dwyer, at the price of $152,000, of the apartment house at
403 West 115th street, through Leslie's father as a dummy,
and for the subsequent transfer thereof to the Park Court
Realty Company, a corporation formed for the purpose of
holding the property, Dwyer's interests in these transactions
being carefully concealed.
2. That in 1919, Leslie arranged for the sale by Inspector
Dwyer of an interest which the latter owned in a hotel
known as the Hotel Van Cortlandt, or more recently the
Hotel DeFrance, located at 142 West 49th street, and
notorious for years for its immoral character.
3. That Leslie had utilized the services of at least one
police officer on Dwyer's staff, to secure evidence in a case
of private litigation in which Leslie had been retained as
REPORT OF JOINT LEGISLATIVE COMMITTEE 243
counsel, and that much of the evidence thus secured was
obtained by tapping the telephone wires of the person con-
cerning whom evidence was desired, in violation of section
1423 of the penal law.
The Apartment House Transaction.
Committee Exhibit ^"o. 243 of October 4, 1921, is a contract
for property executed in March, 1920, and covering the sale by
the Simley Realty Corporation to Warren Leslie of the above
mentioned property on West 115th street, for a consideration of
$152,000.
Dwyer was the actual purchaser of this property, but when
conveyance was actually made the grantee named was one William
Leslie, father of Warren Leslie. The property was subsequently
transferred by the nominal grantee to the Park Court Realty
Company, a corporation organized in Warren Leslie's office and
whose directors were persons employed in Warren Leslie's office.
Annie L. Rogers, a tenant of this apartment house, identified
(p. 2240) Inspector Dwyer as the man who introduced himself
to her on a date subsequent to August 15, 1921, as the owner
and superintendent of the apartment house.
Frank Wulf, a member of the police reserves, testified (p.
2542) that at Inspector Dwyer's request he did some work at
403 West 115th street, that Dwyer' s son Ralph would, from time
to time, call up Cortlandt 33 and ask for " Dad/ 7 for instructions
about the work, and that sometimes Inspector Dwyer himself
would come and give instructions about the work.
On August 31, 1921, John F. Dwyer made an affidavit in
connection with litigation between a tenant and the Park Court
Realty Company, to the effect that he was neither a director,
officer, nor agent of the corporation, and was in no wise connected
with the management or business affairs of said corporation. On
September 16, 1921, he made a second affidavit in the same case
to the effect that he was neither " an officer, director, nor stock-
holder of the defendant herein" (Park Court Realty Corpora-
tion), that he had " no financial interest in said company," and
denying that he was "the owner of the premises referred to 77
herein, and denying that he had " any interest therein. 77 The
affidavit continues, "Deponent further says that since July, 1920,
when the Park Court Realty Company, Inc., acquired the prop-
erty, I have visited the premises on several occasions solely for
244 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
the purpose of seeing my two sons, James and Ralph, both of
whom lived at the time in the premises."
Thirteen days later (September 29) Dwyer testified before the
Committee under oath that he was the purchaser of this property,
that, on the advice of Leslie he had the property conveyed to Wil-
liam Leslie, but that (p. 2276) he was the " real party in inter-
est," and that it was by his (Dwyer's) direction that the prop-
erty was conveyed by William Leslie to the Park Court Realty
Company. He stated to the Committee that (p. 2279) "between
the seventh of June and probably the first of July" he assigned
all of his shares in that company to his son and that his son
(p. 2281) paid nothing for the stock so assigned. When asked as
to his son's whereabouts, Dwyer replied (p. 2279) "He left here
on the steamer l Steelmaker ' for Boimbay, India, calling) at
several ports on the way. The boy got sick." Dwyer also stated
at first that he had a general power of attorney from his son, but
later denied it.
With respect to Dwyer's statement that his son was sick,
Patrick F. Donnelly, marine superintendent, Isthmian Steamship
Tine, owners of the S. S. " Steelmaker," on which James L.
Dwyer sailed, testified (p. 2497) that Dwyer introduced his son,
James, by letter, saying " he is desirous of going to sea and I will
appreciate anything you may be able to do for him," and that
as a result the boy was shipped as an ordinary seaman with wages
of $52.50 a month. In reply to' the question: "Was he in good
health ? ", Donnelly said, " He appeared to be all right."
With respect to Dwyer' s statement that he had assigned all his
stock in the Park Court Realty Company to his son before the
latter sailed, Gertrude M. Steinway, an employee in Leslie's office
and secretary and treasurer of the Park Court Realty Company,
produced the stock book of the company which showed the follow-
ing distribution of stock as of October 4, 1921 :
Date Number
Name of Issue of Shares
John F. Driscoll April 6, 1921 5
Cornelius F. Dwyer April 6, 1921 29
John F. Dwyer! April 6, 1921 106
Gertrude M." Steinway April 11, 1921 1
James L. Dwyer .. April 6, 1921 30
EEPOET OF JOINT LEGISLATIVE COMMITTEE 245
Her testimony on this point follows (p. 2499) :
" Q. Has any transfer of 106 shares issued to John F.
Dwyer to anybody else by him have you any record of it ?
A. ^N"O, I have not.
Q. Has your attention been called to it in any way? A.
It has not."
The evidence indicates that Inspector Dwyer, in spite of his
affidavits and testimony remains the real party at interest with
respect to the Park Court Kealty Company property.
The Hotel Van Cortlandt Hotel De France.
Dwyer admitted (p. 2528) that he had been a stockholder in
the company which owned the Hotel De France, formerly the
Hotel Van Cortlandt, on West 49th Street.
The Committee subpoenaed transcripts of the bank accounts of
Leslie and Dwyer with the Empire Trust Company, and also
Dwyer's deposit slips. These records showed that Dwyer depos-
ited on January 22, 1920, a check on the Empire Trust Com-
pany for $6,651.45, and that on the same day Leslie's account
was charged with this item. Leslie voluntarily offered to exhibit
his personal ledger and to explain to the Committee the circum-
stances surrounding all his payments to Dwyer, including this
amount. He was given this opportunity informally and exhib-
ited a ledger containing an account with Dwyer in connection with
the Hotel De France property, thus establishing the fact that he
had handled funds from the sale of Dwyer's interest in that hotel.
The unsavory character of that hotel in the past few years has
been notorious, and as Dwyer for some time was the Police Inspec-
tor in command of the Fourth Inspection District in which this
hotel was located, he must have known officially of its disorderly
character, but he testified that the reputation of the hotel was
good, that he never stationed policemen at the hotel to suppress a
nuisance, and that he knew of no men being stationed there for
that purpose.
The records of the Police Department with respect to these
premises, however, contain a copy of a letter written by the Police
Commissioner, September 26. 1918, to the receiver of the Hotel
Van Cortlandt, reading in part as follows:
" For s^me time past the Hotel Van Cortlandt was run
in a manner that compered strict police surveillance. Its
*.
246 INVESTIGATION or AFFAIRS OF NEW YORK CITY
reputation as a rendezvous for undesirable characters is so
confirmed that the police of the district have felt it necessary
to continue to give it, at least, casual supervision."
Police Commissioner Enright described this hotel in his testi-
mony before the Committee, as follows: (p. 3672)
" It is one of many other such houses in this town we have
to watch all the time. * * * They have entertained
single men and their wives, and single ladies and their hus-
bands frequently. You would be surprised too, Senator, if
you knew who some of them are."
The police records also show three arrests at the Hotel Van
Cortlandt Hotel De France for prostitution in 1918, and one
in 1920, and- that patrolmen were stationed at the hotel from
April 24, 1918, to May 10, 1918 ; from June 25, 1918. to July 2,
1918 ; from November 23, 1918, to November 24, 1918, and from
October 31, 1920, to November 2, 1920.
That a police inspector should be financially interested in such
a resort needs no further comment.
The Wire-tapping Case.
Warren Leslie, Dwyer's attorney in these other two transactions,
was engaged as counsel by Mrs. Allers in her litigation against
her husband. He employed John W. Sutter, a policeman on
Dwyer's staff, and Sutter's brother-in-law, James Shaw, to secure
evidence against Dr. Allers. Sutter came almost daily to Leslie's
office with detective reports and was known by at least one person
in the office as " Shaw." The real Shaw rented a room in a house
across the street from Dr. Allers' house and after the room was
thus rented a wire was strung to it from the telephone post on the
street. Shaw told his landlord that he was a detective. The land-
lord testified that the wire was fastened to a hook outside the
window and that there was a little round attachment to the end
of the wire. The landlord's wife identified SHitter as a frequent
visitor to Shaw's room, but stated that he was known to her not
as Sutter, but as Sullivan.
Persons employed in Leslie's office admitted that they knew of
the wire tapping and that they had heard Leslie discuss the mat-
ter. A lawyer associated with Leslie in the case refused to use
the evidence secured in this manner when he learned how it had
REPORT OF JOINT LEGISLATIVE COMMITTEE 247
been secured and by whom. He testified that Shaw admitted
under pressure that Dr. Allers' wires had been tapped and that
reports purporting to be reports of " shadowing " were in fact
written up from listening in to telephone conversations.
Mrs. Anna F. Wamsley of Olmstedville, N. Y., identified Sutter
as a man who came to her home in November, 1919, to make
inquiry about Dr. Allers.
Leslie denied knowledge of the wire-tapping and explained
Butter's frequent visits to his office by saying, " What Sutter came
to my office with were charges preferred against members of the
police reserve, which I looked over and passed upon before they
were filed. That was his business in my office." The records of
police reserve court-martials, however, show a total of only 51
cases from July 20, 1918, to October 1, 1921, only 11 of which
bear Leslie's name. The latest of these 11 is dated April 4, 1919,
and was concluded May 2, 1919, several months before the detec-
tive work described above. Sutter's " very frequent visits " to
Leslie's office after May 2, 1919, must therefore be explained in
some more plausible way if he is to be cleared of the charge
against him.
It appears from the evidence that Sutter, Shaw and Leslie per-
jured themselves before the Committee and that Sutter and Shaw
violated the penal code by tapping the telephone wires of Dr.
Allers.
1
248 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
DIVISION OF LICENSED VEHICLES OF DEPART-
MENT OF LICENSES.
The Department of Licenses was created by Chapter 475 of
the Laws of 1914 as a consolidation of most, but not all, of the
previously existing licensing agencies of the C'ity government. It
has control of the licensing, among other things, of hacks, cabs
and taxicabs and of drivers or chauffeurs of hacks, cabs and
taricabs. That part of its jurisdiction is exercised through the
Division of Licensed Vehicles.
The City ordinances (Chapter 14) provide, with reference to
the vehicles ( 84) that they shall not be licensed until they
have been " thoroughly and carefully inspected * * and
found to be in thoroughly safe condition * * *, clean, fit, of
good appearance and well painted and varnished." Taximeters
must be examined for accuracy. With reference to taxicab
chauffeurs the ordinances, while not expressly so providing, con-
tain provision doubtless intended to prohibit the licensing of
any but persons of good character. They require the produc-
tion of affidavits of good character from two reputable citizens,
a " testimonial " from the last employer and the filling out of
a sworn statement showing, among other things, whether the ap-
plicant " has ever been convicted of a felony or a misdemeanor "
and " whether he has ever been summoned to court,"
Prior to this administration, the discharge of this branch of
the License Department's functions had been largely committed
to the Chief of the Division of Licensed Vehicles. Cabs were
kept clean and safe; taximeters were reasonably accurate; and
taxicab chauffeurs were kept under strict supervision. The pub-
lic was well served, but the drivers complained of the rigid
control to which they were subjected.
With the advent of the present administration, this control
was considerably relaxed. The Chief of the Division of
Licensed Vehicles was shorn of power. An official sub-
ordinate was made his actual superior in charge of the
issue of licenses and one of the Deputy Commissioners,
James F. Geraghty, a district leader in the Bronx, was
placed in direct charge of the Division. From time to time the
complicity of taxicab chauffeurs in crimes of violence, often com-
mitted in broad daylight, roused public concern. While this
branch of the inquiry was under way, Geraghty ? s resignation was
invited and submitted.
REPORT OF JOINT LEGISLATIVE COMMITTEE 249
The Committee's investigation disclosed that the administra-
tion of the Division of Licensed Vehicles of the License Depart-
ment under Deputy Commissioner Geraghty not only made it
a hot bed of petty graft, but that the safety of the public has
been seriously menaced by the large number of licenses, as taxi-
cab drivers, issued to ex-convicts. All of such cases were not
located by the Committee. That was prevented by the obstruc-
tive tactics of certain members of the division's force and by
lack of time available for this phase of the investigation. The
Committee did, however, find that taxi-drivers' licenses had been
issued within a year to 153 convicted felons and 226 persons
convicted of serious misdemeanors. These 379 licensees were
either actively plying their trade with the approval of the de-
partment or were the holders of licenses enabling them so to do,
which the department made no serious effort to cancel. In many
of these instances the criminal records of the applicants were
known before the licenses were issued and in all of them, it
should have been known before such issue. Of the 153 con-
victed felons who were licensed taxi-drivers, sixty-seven had been
convicted of grand larceny, thirty-five of burglary, five of rob-
bery, fifteen of felonious assault, five of assault in the second
degree, three of rape, three of abduction and twenty of miscel-
laneous felonies. In many instances licensees had been convicted
of the same or of an assortment of felonies at various times prior
to obtaining the license. They have been counted only once in
the foregoing statement.
Of the convicted misdemeanants holding licenses, slightly more
than half, 117, had been convicted of petty larceny. This is,
however, more serious than it seems, because many of these were
cases, in which petit larceny was the plea of guilty upon the
charge of grand larceny, burglary or other graver crime. In-
toxication, impairing the morals of a minor, unlawful entry,
indecent exposure and having concealed weapons were among the
other convictions against persons to whom licenses were granted.
The explanation of such a condition may be in mere ineffi-
ciency. Certainly the haphazard confusion in which the records
of the division were found was well calculated to increase its
difficulty in locating its information about a given applicant.
On the other hand, the evidence in relatio-n to other activities
of the division, difficult as it was to get from those who had been
victimized and who naturally feared reprisal for any disclosures
they might have made, would tend to indicate that convicts ob-
250 INVESTIGATION OF AFFAIES OF NEW YORK CITY
tained taxi-drivers 7 licenses either for a money payment or
through the use of political influence.
The inspection of a taxi-cab submitted for license has been a
prolific opportunity for petty graft. One inspector would ex-
amine the brakes; another the general appearance of the cab.
The second began after the first finished and gave the applicant
an O. K. slip. These " O. Ks " caried a well understood price.
This condition had been brought to the attention of Geraghty
by one of the hackmen and Geraghty promised to end it, but
nothing was done.
Geraghty's tolerance is not difficult to understand in view of
his own standards of conduct in public office. For instance,
when his political club held an " outing " twenty-seven taxicabs
were furnished him gratis by an association of taxi-drivers, which
itself paid the men who owned the cabs. When his club gave
an affair this same organization was requested to and did buy
$100 worth of tickets. When the bill for the transfer of juris-
diction over the licensing of cabs and drivers was pending, em-
ployees of the division professed to fear for their positions and
raised a fund for expenses in working up opposition by the sale
of raffle tickets among the persons licensed by the department. In
a word the division has been completely demoralized.
The Routine of a Taxi-Driver's Application.
In relation to the issue of taxi-drivers' licenses, the claimed
routine should be stated.
The applicant for a license to drive a hack or taxicab goes to
517 West 57th Street, the office of the Division of Licensed Ve-
hicles and sumbits his application to John S. Egan, inspector of
licensed vehicles. If he desires a license to drive a taxicab he
is asked to give his state chauffeur's license number and must
have one before a taxi-driver's license is issued to him. He is
then given an application to fill out. This includes the usual
questions as to name, residence, age, place of birth, etc., and in
addition the following question : " 10. Have you ever been ar-
rested or summoned to court? Give particulars and disposition
of every such case." The applicant is required to give the names
and addresses of his employers and his occupation for the past
five years. He must give a personal description of himself, sup-
ply two copies of his photograph, and submit an impression of
his finger prints. He must have two witnesses who will vouch
for his character and a statement from a reputable physician..
REPORT OF JOINT LEGISLATIVE COMMITTEE 251
that he is physically fit to drive a taxicab and in addition he
must have a certificate of his employer stating the reason for
the termination of the employment. On the reverse side of the
finger-print record is a space headed " Remarks." This is for
the notation of the Police Department. The finger-print rec-
ord is signed by the license inspector who takes the applicant's
finger prints.
The original application and the finger-print record is sent
from the License Bureau at 57th Street to the Investigation Squad
of the Police Department at 30th Street between Sixth and Sev-
enth Avenues.
The application and finger-print record are generally received
the same day they are completed and are delivered to the Investi-
gation Squad by a messenger from the License Department, but
in favored cases where an applicant is particularly anxious to
have immediate action the applicant himself is permitted to de-
liver the papers.
When the finger-print record and the application are received
by the Investigation Squad an entry is made in a book known as
a Register of Applicants and Record of Finger Prints. The
application is given a serial number. The name and address
of the applicant and the state license number are also noted. In
this book is also placed the date on which the final report is sent
by the Police Department to the Department of Licenses with
a statement as to the number of felonies, misdemeanors and sum-
monses on the record of the applicant. There is also a nota-
tion as to whether or not there is a finger-print record in the
Police Department.
The following day the finger-print record and the application
are separated. The finger-print record is then sent to the Po-
lice Department's Bureau of Criminal Identification for compari-
son and search. In three or four days it is returned to the
Investigation Squad with notations under the caption " Re-
marks." These remarks give the criminal record of the appli-
cant, stating the felonies and misdemeanors, together with the
dates of the arrest. These notations are neither signed nor dated.
In cases where the applicant's finger prints are not on record
in the Police Department, the space is left blank, indicating that
the man has no criminal record. Occasionally the examiner
will write his name in the space under " Remarks " when there
is no criminal record. After the notations above referred to
have been entered in the Register of Applicants and Recording
252 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
Finger Prints, the finger-print record is returned to the License
Department at 57th Street. A copy of the finger-print record
is retained hy the Investigation Squad.
After being separated from the finger-print record the appli-
cation itself is sent to the Old Record Room of the Police De-
partment at MacDougal Street for search of arrests of any kind.
After the records at the Old Record Room have been searched
the application is sent to the Bureau of Information for a search
of the records of the last two years. The applications are re-
turned to the Investigation Squad from the Bureau of Informa-
tion very irregularly in lots. This process, from the time the
application leaves the Investigation Squad until it is returned,
takes about two weeks. When returned the applications are
checked off on the Register of Applicants and Record of Finger
Prints to see that all have been returned. ~No date is placed
on the application. Then the application blank is turned over
to an investigator of the Investigation Squad. The staff of the
Investigation Squad consists of fifteen regular men, including
Acting Captain Finn. The squad is known as the " Crippled
Squad " because the staff is composed of men who have been
injured or incapacitated in the performance of duty. The in-
vestigator who receives the application makes a personal investi-
gation. He is supposed to interview the applicant and verify
the statements on the application and other material details. He
is supposed also to interview the vouching witnesses, the physi-
cian and the former employer of the applicant and he is supposed
to make general inquiries among the applicant's business asso-
ciates and those in the neighborhood of his residence, as to the
applicant's character and general fitness to drive a taxicab. When
the investigation is completed the investigator makes his report
to the Investigation Squad.
The report of the investigator, together with all other data,
including that originally noted on the finger-print record, com-
prises what is known as the Police Report. A typewritten copy
of this is sent to the Department of Licenses with the applica-
tion by messenger. A copy of the report is retained by the In-
vestigation Squad.
Because of the detail of the investigation and the physical
incapacity of the members of the squad it is quite usual for sev-
eral months to elapse between the time the application is sent
to the Police Department and the time it is returned therefrom
to the License Department.
REPORT OF JOINT LEGISLATIVE COMMITTEE 253
In the meantime the finger-print record having returned to the
License Department, if it contains no notations in the " Re-
marks " space, it is assumed that the applicant has no criminal
record, and the License Department immediately issues a license.
When the finger-print record is received from the Police De-
partment with a notation under " Remarks " to the effect that
the applicant has an important criminal record, the license is
not issued. If the man has been convicted of a felony the appli-
cation is marked " denied " and that is said to be the end of
the case. If the police record shows an arrest the man is required
to obtain from the court before whom he was arraigned the proper
official documents, showing the disposition of his case.
If he was convicted of a misdemeanor his papers are sent to
Deputy Commissioner Geraghty at the main office. Geraghty
passes on the merits of the case and marks the application 0. K.
or denied. If Geraghty O. K.'s the application the license is
issued.
In many cases, although the finger-print record is returned
with nothing to indicate a criminal record, the subsequent police
report some time later discloses the fact that one applicant has
such a record. In such cases, the license having been already
issued to him, his file is removed from the " active " file and
placed in the " suspended " file. A letter is then sent out to
the licensee to the following effect : " Please call at this office as
soon as possible with your badge and book as it is necessary
to make some correction in same as there are two men working
on this same number." If the licensee fails to see through this
strategy and reports, his badge and book are taken from him and
the entire container is sent down to Commissioner Geraghty for
a hearing on the case. If Geraghty so 1 decides the license is re-
voked. If not, the badge and book will be returned to the man
and he will be permitted once more to operate.
If the licensee does not call in response to the stupid " decoy "
letter, neither the License Department inspectors nor the police
are instructed to pick the man up. He continues to operate
until he is disposed to call at the department either in response
to a complaint for other misconduct or to get his license renewed.
Perhaps at such time his license may be taken up because of his
criminal record.
The vices of such a procedure are obvious. No license should
be issued until all the available police information with refer-
ence to the applicant has been obtained. No applicant should be
254 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
permitted to act as messenger between the License Department
and the Police Department. The police investigation should he
made by able-bodied men and all reports should be signed and
dated by the officer submitting them. The police should be re-
quired actively to co-operate in picking up the licenses of per-
sons improperly holding them. The applicant's false statement
as to his criminal record should automatically cancel his license.
While licenses expire on April 1st, the department permits men
to operate for as much as six months thereafter without renewal
of their licenses. In short, for aught that the authorities do
to prevent, a convict once licensed and that does not appear to
be difficult to achieve may operate unmolested for eighteen
months.
These conditions demand remedy. If the License Department
is to retain jurisdiction, its administrative methods must be
changed along the lines above mentioned. Doubtless too, much
of the personnel in the Division of Licensed Vehicles should be
changed. Upon that assumption the divided duty and responsi-
bility between the Police and License Departments would persist.
That may warrant the transfer of the jurisdiction to the Police
Department, which alone has adequate force and equipment for
investigation. That, however, would disrupt the centralization:
of licensing jurisdiction effected for good reason in 1914 and,,
moreover, the discharge of licensing functions by the Police De-
partment has, in the past, and continues as to Steam Boiler in-
spection and licensing, to be unsatisfactory. Upon these matters
the Committee submits no recommendation for legislation, for
it assumes that in the revision of the City Charter there will be
a separation of the structure of the City Government from the
administrative code thereunder, the latter to be adopted by the
local authorities, together with jurisdiction vested in them to
abolish and combine or consolidate existing bureaus. The dis-
position, then, of the licensing function as to taxicab drivers
would be for the local authorities to determine.
REPORT OF JOINT LEGISLATIVE COMMITTEE 255
THE ADMINISTRATION OF THE DEPARTMENT OF
MARKETS.
The Committee's investigation of the Department of
Markets leaves no doubt upon the fact that, under the administra-
tion of Commissioner Edwin J. O'Malley, that department,
created as a public agency to combat and control the rising cost
of food to the people of New York City, has been perverted into
a vehicle for the levy of " graft " and the play of political favor-
itism, the cost of which must inevitably have been passed on to
the public.
The Establishment of the Department.
Prior to the enactment of the Farms and Markets Law by Chap-
ter 802 of the Laws of 1917, public markets in the City of New
York, such as the Washington M'arket, the West Washington
Market and Jefferson Market, had for many years been under the
jurisdiction of the respective Borough Presidents as to their
physical maintenance and of the Department of Finance as to the
fixation and collection of rentals for space therein. During all
that period no breath of scandal attended the administration of
the markets and that situation continued during the brief period
in the closing days of the administration of Mayor Mitchel during
which the markets were administered upon the plan authorized
by the legislation of 1917.
That legislation (L. 1917, Ch. 802, Sect. 71) authorized the
Board of Estimate and Apportionment, by resolution approved
by the Board of Aldermen, to establish a Department of Markets,
headed by a Commissioner, appointed and removable at pleasure
by the Mayor. Such resolutions were duly adopted by the respec-
tive Boards in June and July 1917.
Sections 72 and 74 define the jurisdiction of the department,
concentrating in it all the jurisdiction previously exercised by the
Borough Presidents and by the Finance Department. The Com-
missioner was authorized to make rules governing the markets,
subject to the approval of the Board of Estimate and it was pro-
vided (Section 81) that all stands and stalls in such market shall
be rented on permits issued by the Commissioner or a subordinate
designated by him.
256 INVESTIGATION OF AFFAIES OF NEW YORK CITY
The Rules.
In 1919 such rules were duly adopted by the local authorities.
It has been the administration of them which has provided such
a fruitful field of graft. They provided, among other things, that :
"A market, stand may be occupied only under a revocable
permit" (Rule 1 (a).)
"All permits are for a bi-weekly period and may be revoked
or terminated by the Commissioner of Public Markets at the
end of any such period, if, in his judgment, the public inter-
est requires it, or at such times or sooner, for a violation of
any of the rules and regulations of the department."
(Rule 1 (b).)
" Permits for markets stands are personal to the individual,
corporation, association or partnership named therein and
shall not be assigned or transferred without the written con-
sent of the Department of Markets." (Rule 4.)
" No market stand or any part thereof shall be sublet or
assigned or used by or for the business of any person, corpo-
ration, association or partnership other than that designated
in the permit .... without the written consent of the
Commissioner of Public Markets." (Rule 5.)
The Rules Administered.
The provisions of these rules are not required by any statute.
They constitute the exercise of a discretion granted by statute to
the local authorities. It has been the apparently arbitrary power,
which they give to the Commissioner to revoke permits and to
approve transfers, which has facilitated the collection of graft and
the attempts so to do. These have been perpetrated so frequently
and so boldly through the active agency of one Charles A. Winter,
General Inspector of the Department and an employee in the
exempt class, that Commissioner O'Malley must have been incred-
ibly stupid and incompetent, if he did not know and approve of
them. A number of instances are detailed hereinafter, including
one in which it was testified that O'Malley himself received $1500,
in cash after " inducing " a standholder in Washington Market,
whose permit was revocable by the Commissioner under the rules,
to sell a piece of property outside the market to the telephone com-
pany. The receipt of this money O'Malley denied, but at the
outset of cross-examination upon this and other features of his
administration, he declined to be questioned and fled from the
witness stand.
REPOBT OF JOINT LEGISLATIVE COMMITTEE 257
Mr. O'Malley's predecessor as Commissioner had been Dr.
Jonathan 0. Day, who had been removed by the Mayor after
charges of misconduct had been made against him and after he
had made similar charges against O'Malley, who was a deputy
under him and whose exit from the department he compelled.
Shortly after leaving the Market Department O'Malley was ap-
pointed a Deputy Commissioner in the Department of Public
Welfare and after Dr. Day's removal he was appointed as his
successor by the Mayor.
Such evidence of corruption in the Market Department, as was
developed by the Committee, was turned over to District Attorney
Swann, in the expectation that he would make it the basis of fur-
ther investigation and prosecution, but the District Attorney de-
clined to proceed. While permittees of the department were tes-
tifying before the Committee to the extortions practiced or at-
tempted upon them, O'Malley announced the revocation of their
permits. This was obviously an attempt to terrorize other per-
mittees and to prevent their testifying to the facts. The Com-
mittee publicly denounced such tactics and demanded O'Malley's
removal by the Mayor. The Mayor declined to take such action,
but the revocations were rescinded and Winter was dismissed
from the department. O'Malley remained and was reappointed as
Commissioner.
No change of state law is suggested by the grave maladminis-
tration of the Market Department, for it should not be necessary
to provide by law that permits should not be made revocable at
will. Indeed, the courts have held in litigations precipitated by
the Commissioner's attempts to exceed his power, that his discre-
tion to revoke mlist be reasonably exercised and may not be
capricious or arbitrary. The Commissioner has, however, dis-
regarded this limitation in other cases not before the Court.
Clearly he should not have even apparent arbitrary power and
the rules should be amended by the local authorities so that per-
mits must be transferred except for cause and may not be revoked
except for cause, such cause to include any attempt to monopolize
the facilities of any of the public markets.
THE HASLOB CASE
Negotiations With Whiting.
Christian Haslob is a retail butcher in Washington Market for
20 years (Haslob 644 & 648). His firm does about $250,000 worth
of business a year (645). They have two stands and storage space
9
*.
258 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
(644-647). They bought one stand from Stark (649) for $2 ? 000
five or six years ago and had no trouble in getting the transfer
from the Collector of City Revenue (649) who then had jurisdic-
tion. They agreed to buy the other stand from one Whiting for
$650 (651) and it was finally transferred in May, 1920 (650),
but not until a money payment had been made therefor.
First Visit to Markets Department, Refusal.
Having arranged to buy Whiting's stand, Haslob went to the
Markets Department to have the permit transferred from Whit-
ing to himself (651). Mr. Bird, secretary of the Department,
told him he could not have the transfer made, because he had
filed no written application for the stand. About six months
later Haslob talked to Winter about the matter (653).
Negotiations With Winter.
Haslob' s testimony is: "I asked him if he couldn't do some-
thing for me, trying to get that stand. * He said he
could * * * I said I was willing to pay a thousand dollars
* * * and didn't care who got it * * *. He said he would
come and see me the next day * * *. He came back the next
day and I agreed to pay him $450 * * * for * * * get-
ting my permit for that stand." (653 and 654). Haslob agreed
to have the money ready the following Monday (656). On the
Monday following, " I met Mr. Winter in Washington Market
* * * about 9 or 10 o'clock in the morning * * at my
stand * * * he asked me to go out with him," (656 and 657).
Pays Winter $450 Bribe.
They left the market together and went to Barclay street and
took the elevated down Ninth avenue. Haslob took the cash from
his safe out of Saturday's receipts (656 and 657). This is cor-
roborated by page 95 of this day book (Exhibit 42), the entry be-
ing: " Saturday, May 15th, 1920 Part Payment on stand Ex-
pense $450." (656, 657 and 658).
Haslob, as they were going south on the Ninth Avenue ele-
vated took the $450 from his pocket and gave it to Winter. They
had no particular conversation. He didn't even say " Thank
you." They separated at the Battery and Haslob took a train
right back to the market. All this was on Monday morning,
May 17th.
REPORT OF JOINT LEGISLATIVE COMMITTEE 259
Second Visit to Markets Department Receives Permit.
Monday morning Winter told Haslob that the permit would be
ready for him. That afternoon Haslob and Whiting went to
the Markets Department (660). They saw McGrath, who showed
them in to O'Malley. Haslob asked for the permit and received
it without delay. (661). He had not yet made any written
application for it. (665).
THE HEINEMAN CASE
Negotiations With McGuiness.
Joseph Heineman has been a retail butcher in Washington
Market since March 1, 1920 (Heineman 668), and did about
$65,000 worth of business the first year. He bought the stand
fixtures from Peter McGuiness for $4,500 (669).
Heineman and McGuiness Visit O'Malley.
On February 3 (673) Heineman and McGuiness went to
the Markets Department to have the permit transferred (671).
McGrath ushered them into O'Malley who asked if the stand was
for Heineman's father, who already had a, stand in the market.
Heineman said " No." O'Malley 'said " Nothing more than can
be done for the present and I will have my inspector investigate "
and asked Heineman to see Winter in the outer office (672).
They Talk With Winter.
They had to pass through Winter's office to get to the Commis-
sioner's office (673). They left O'Malley and talked with Win-
ter on the way out. He merely asked where the stand was located
and where Heineman lived (674).
Heineman Summoned to Winters Office Request for $1,000.
A few days later word was left with Heineman's father that
Winter wanted to see Heineman at the Market Department.
Heineman went and conversed with Winter at first in the latter's
office and then Winter led him outside in the main hall near the
elevators. Winter asked how much Heineman was paying for
the stand. Heineman refused to tell. Winter said it was custom-
ary, in order to get a permit, to pay something in addition (674).
" I said I am paying too high a price and I cannot afford to pay
anything more." Winter said, " You will have to pay more "
and I said " How much " and Winter said " a thousand dol-
lars." I said " That is out of the question, I cannot pay that "
,
260 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
* * He said my father already had two stands down there
and getting too many in the family * * * he said ' you will
have to get the money somehow or other because he won't accept
anything less ' * * * speaking of somebody else." (675). " He
was leaving the hall .and he turned back and said, ' it is absolutely
useless for you to call any of those cheap politicians in to plead
for you ' '' (676). At this interview Winter brought Heineman
downstairs to another department to locate his residence on the
map to see if he lived in New York City (678).
Summoned a Second Time; Request Reduced to $500 ; O'Malley
Comes In.
About a week later Heineman received through his father
another message to call and see Winter. Winter took him into an
office adjoining the Commissioner's. " He sat me down and
wanted to know if I had the money ready for him I
said that I had no money for him and he said i you will have to
pay something ' and I said that I could not afford any such
amount. ' Well/ he said, ' Can you pay $500, because he might
accept that ? ' And I said " Who is he ? " He said, ' We are not
mentioning any names now.' I told him it was out of the question,
that I could not pay him any $500. While we were discussing
this the door opened from the Commissioner's office and Com-
missioner O'Malley came into the office. He apologized, said he
did not know it was occupied and he walked over and took a book
out of a cabinet and went outside again * * * into his own
office." (677).
Third Conference Alone ivith Winter.
Either at the Markets Department or in Washington Market,
Heineman had still another talk with Winter. " He wanted to
know if I had any money ready for him, and I told him ' no '."
He told Winter he could not pay him anything and that he was
not going to pay him anything (679).
Heineman Sees Minder; Gets Permit Without Bribe.
In the meantime Heineman had asked some of his friends for
their advice " in order to get the permit and avoid paying any
.money to the inspector " and " to see if they could not do some-
thing for me to hurry the matter along." He told them he had
been asked to pay money (678). Mr. Minder, the President of
the Merchants' Association at Washington Market, was one of
REPORT OF JOINT LEGISLATIVE COMMITTEE 261
these friends. Thereafter Heineman received word both from his
father and from Mr. Minder to call for the permit. He then went
to Commissioner O'Malley (679 ! ) with Mr. McGuiness. O'Malley
insisted on Heineman signing an agreement to employ McGuiness
because the latter was an old man and could not find employment.
He then received the permit (680). This was on February 28,
1920.
THE WOOLSEY CASE
Negotiations with Yonteff.
Stephen Woolsey has been in the retail butter, cheese and egg
business in Washington Market since November, 1913 (Woolsey
682-683). The annual volume of his business is $200,000. He
used to have five stands. He now has only two (683). He sold
the other three to one Yonteff (684). They agreed on the price
about the first of January, 1920. It was to be $5,500.
First Visit to O'Malley.
Woolsey then went to O'Malley's office alone on January 2nd
or 3rd (691), to get the stands transferred (685). No one eke
was present, Woolsey asked) O'Malley to transfer the downstairs
stands to Yonteff. He said he could not, but if he wished to surren-
der the stand the city would pay for the fixtures less depreciation
(686). Woolsey refused, saying that he had worked eight years
building up a business there and could not afford to sell it merely
for the value of the fixtures. He was to receive more than the
value of the fixtures from Yonteff. " I tried to persuade O'Malley
to miake the transfer and he said it couldn't be made and I left."
O'Malley said he could surrender the stands, but he would not
consent to making the transfer. (687).
Attempt to get Someone to Intervene.
Woolsey next visited a customer of his who runs a restaurant
in Brooklyn where " some men went to have lunch that could be
of assistance." Woolsey asked if he knew of any one that could
assist in having the transfer made. He said he would see. In
two or three days he replied that " he couldn't do anything for
me."
Second Visit to O'Malley.
He then went again about one week later (690) to O'Malley
alone (688). He again requested O'Malley "to transfer the per-
mit to Mr. Yonteff." " He said that he couldn't do it, if I wanted
'
262 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
to surrender the stand I would be paid * * * for the fixtures
* ~ x ~ * less depreciation * * * I said, ' I don't see why it
is that after working and building up a 'business for eight years
that I will have to get rid of it for less than my fixtures cost me
to start in business.' " (689).
First Conference with the Stranger.
Aibout ten days after his second visit to O'Malley, Woolsey
received a telephone call from someone who did not give his name.,
(690) but said "I understand you are having trouble getting
your permit transferred * * * if you will meet me on the
corner of Barclay and Church Street, perhaps I can be of some
service to you." Woolsey said " all right, I will meet you there
in about half an hour" (691). He went there and saw a man
who said he was the one who had telephoned him. He was of
medium size with smooth face and refused to give his name
(Woolsey 701). " He said * * * he could help me out but
his time and services would 'be worth something, and he felt he
ought to be paid for it * he said that it would cost;
$1,000 * * * eventually we reached a price of $450 (692)
and I told the man that I would let him know the next
day." (693).
Conference between Woolsey and Yonteff.
The next day Woolsey told Yonteff " if you want to pay $100
of this, I will pay the rest " and Yonteff said "All right " (Wool-
sey (693). Yonteff remembers only that Woolsey said " it would
cost them something to get this permit." Yonteff volunteered
(709) to contribute $100 and so the price became $5,600.
(Yonteff 704 and 708).
Second Conference with the Stranger.
The next day Woolsey met the same man at the same place.
Wcolsey said he was trusting to his honesty to put the thing
through. He had never seen him before and might not know
him if he saw him again. He paid the man $450 then and there,
having cashed a check with one of his customers for $250 and
taken $200 out of receipts of the business (Woolsey 694).
Permit Issued.
Two days later Yonteff received a telephone message to call at
the department as the permit was ready for them (Woolsey 695).
REPORT OF JOINT LEGISLATIVE COMMITTEE 263
In the morning of the same day or the day after, Yonteff and
Woolsey went to the department, had a general conversation with
O'Malley at which no reference was made to their previous con-
versations or the subject matter thereof. O'Malley gave instruc-
tions to have the permit issued to Yonteff and Woolsey sur-
rendered his old permit. Yonteff paid the agreed price as later
changed to $5,600. (Woolsey 697 and 8 and Yonteff 703
and Ex. 48).
EIA.HN-KLOEBLEIN CASE
Steers & Menke Negotiate with Kloeblein.
Frederick E. 'Menke is treasurer of 'Steers & Menke, Inc., a
corporation handling poultry, calfs, pigs and pork products
(Menke 717) having been in this business since 1883 with its
main place of business at West Washington Market. They are
commission merchants who receive shipments direct from pro-
ducers. Their customers are wholesalers and butchers. They
have seven stands. (718). They have known Albert Kloeblein
13 years. Kloeblein, individually and representing his father's
estate, had been in business in West Washington Market adjacent
to Steers & Menke for 25 years. Kloeblein was not a " direct
receiver." He bought beef from slaughter houses and resold
it. His father died about four or five years ago (719). Steers
& Menke negotiated with Kloeblein for his stands, culminating
in a definite offer on March 31, 1921 (720 and Exh. 50).
Kloeblein was to have receipted for $100 as deposit on six stands,
total price to be $8,000, but did not sign because of their con-
ference with O'Malley (721).
Menke and the Kloebleins visit O'Malley.
Menke, Albert Kloeblein and his brother James, went to
O'Malley's office (Menke 721) on March 31. Albert Kloeblein
said business was poor and he wanted to sell out. He said that
Menke' s father and his father had been doing business alongside
each other for years and he felt Steers & Menke should have the
preference in transferring the stands. O'Malley asked what terms
they had agreed upon and they told him $8,000. (Menke 722).
On April 1st Menke lictated written application accordingly,
signed it ard direc**"] thit it be mailed. He received no reply.
(Menke 72*;,.
J
264 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
Kahn Negotiates with Kloe~blein.
Adolf Kahn was in the butcher business for nine years at 723
Tenth Avenue. He buys from slaughter houses and resells to
butchers. (Kahn 731). He says that for about a year he had
been negotiating with Kloeblein for his stands and on March
25, 1921 reached an oral agreement with him to sell for $8,000.
Whereupon Kahn mailed a written application for the stands to
the Commissioner of Markets (Kahn 732).
Kahn Requests McManus' Help.
Having made written application for the stands, Kahn went to
see former Senator Thomas J. McManus. One of the market men
had told him he should get some one of that sort to intercede
for him. He (Kahn) had had business relations with McManus
(Kahn 733) McManus said " he would do that for me." (Kahn
734.)
Kahn, Kloeblein & Menke Visit O'M alley.
On the Saturday after his first talk with McManus, Kahn saw
Kloeblein and learned that Steers & Menke also wanted the
stands, Thereupon he called up McManus and made an appoint-
ment to go to O'Malley's office at 11 o'clock on Monday and
arranged for Kloeblein to be there also (Kahn 734). They met
McManus downstairs (735) at about 11.30 (736 and 738).
Before leaving his office he drew and cashed a check for $3,000
being the first check he drew that day (733, 6 and Ex. 53). On
the way down he stopped at his bank and cashed the check.
Kahn claims that he met his brother-in-law at the bank by
appointment and gave him the money, so that he claims he did
not have the $3,000 with him when he reached the Municipal
building (737 s ). Downstairs he met first McManus and then
Kloeblein, both by appointment, and introduced them. (Kahn
738 and 739). They went upstairs and into Secretary McGrath's
office (740). They were told the Commissioner was not in and
that they should wait. McManus left Kloeblein and Kahn there
(741) and came back in about two hours when all three and
McGrath went into O'Malley's office (741). They remained
about half an hour. McManus introduced Kahn saying, " This
is a friend of mine, Mr. Kahn, which I spoke to you about."
O'Malley paid no attention to Kain, but said to Kloeblein, "Are
you selling this stand ? " He said, " ISTo, I have to get rid of
REPORT OF JOINT LEGISLATIVE COMMITTEE 265
them on account of my brother being sick." " From the way
they talked, it appeared that they were acquainted before."
(743.) O'Malley said, " You cannot sell these stands, you un-
derstand that ? * * * If I knew you were selling those stands,
I will take this permit away from you." Kloeblein said, "All I
am selling is the contents of my fixtures." Kloeblein surrendered
the permit he had to the Commissioner and the latter told Mc-
Grath to make out a permit to Kahn. When this was done all
three left together. It was about 4 o'clock. (748.)
Kloeblein, who could not be served with process in ]STew York
or compelled to testify in JSTew Jersey, where he resides, did, how-
ever, make a statement to an examiner for the Committee. He
stated that it was about 1 P. M. when they reached the Com-
missioner of Markets office (McDeirmott 819). They waited
until 3 P. M. James Kloeblein was with them but was told to
stay outside. When he entered O'Malley's office he saw tnerc?
Kahn, O'Malley, McGrath and both McManuses, the former
Senator, and his brother, Charles, an Alderman. (McDermott
820.) O'Malley said to Kloeblein, " Now, you are not selling
these stands. Kloeblein hesitated and Senator McManus kicked
his foot and he refrained from replying. (McDermott 822.)
Kahn pays Kloeblein only $6^50.
On leaving O'Malley's office Kahn, Kloeblein and McManus
rode up town in Kahn'>s machine, which had been waiting outside
the Municipal Building (748 & 749). Kloeblein stated that
Alderman McManus and Albert Kloeblein were also in the
machine. Alderman McManus got out at 48th Street between
9th and 10th Avenues on the north side and entered a house.
Senator McManus got out a little farther west (McDermott 822
& 823). McManus left the machine at 49th Street and 8th Ave^
nue. Kloeblein and Kahn reached Kahn's office about 4 :30 p. M.
Kahn then gave Kloeblein a check (Exh. 55) for $6,250 (749),
although he had agreed to pay $8,000. Kahn testifies : " I told
him that the stands cost me a great deal more to fix up than I
first expected they were to cost * * * We battled for about a
half hour and he couldn't get no mlore out of me than $6,250."
(750). There had been no written agreement, and Kahn now
had the permit (753).
Kloeblein says he asked Kahn why the check was only for
$6,250. Kahn showed by his checkbook that he had drawn a
check to cash for $3,000, and said he had used the cash for trans-
266 INVESTIGATION OF AFFAIKS OF NEW YORK CITY
feiring the stands. " Kahn said the $1,750 that Kloe'blein did
not receive was one-half of what it cost him to get the stands,
that he was standing one-half and Kloeblein would have to stand
the other half." (McDermott 823).
Kahn Draivs a $500 Check to McManus.
On returning to his office from the Markets Department on
April llth Kahn also drew a check for $500 to Thomas McManus.
Kahn testifies : " I reconsidered and I wouldn't use that check
* * * I don't know if it was destroyed or not." It was replaced
by another check taken from the back of the book (Kahn 753 &
756; Mass. 775 & 776) drawn to "Bearer" (Ex. 56) (Stub is
Ex. 57). Kahn claims he gave his check to a bookmaker named
Henry Jones to make a bet with sometime in April on the Demp-
sey-Carpentier fight. (754). Kloeblein says he asked Kahn what
the check for $500 was for and he replied " That is for the Alder-
man." Kahn then drew another check for $125.15 to the Aeon
Garage. This is run by the McManuses and Kahn keeps some of
his trucks there (756).
Maas, Kahn'e accountant, erased the words " Thomas
McManus" on the check stnb (Ex. 57) at Kahn's direction and
wrote in the word "Bearer" (Maas 776). In the cash book
(Ex. 58), under date of April llth he originally entered " Thomas
McManus." Later he applied ink eradicator and then entered
"Bearer" (Maas 778 & 779; Osborne 796). In the cashbook
he originally entered page 50 as the page of the ledger where this
item of $50'0 would be posted but eradicated page "50 " and
wrote in "8" (Maas 778 & 779; Osborne 796). He also
eradicated all entries on page 50 of the ledger (Maas 780 & 781)
on which he had entered " Investment Market Stands " " $3,000 "
and other items, concededly relating to the cost of the market
stands. (Osborne 798). Maas also made other eradications of
entries which he had made in reference to the $3,000 check to
cash and $500 to McManus (Maas 781 to 791 and Osborne 794
to 803).
Menke Leamp of Transfer to Kahn.
On a Tuesday about two weeks after April 1st, having received
r-o reply to his application of that date, Menke went t the De-
partment but was told that the Commission was busy. His
secretary, McGrath, told him that the stands had been transferred
to Adolph Kahn the day after (Menke 724).
REPORT OF JOINT LEGISLATIVE COMMITTEE 267
Conference at Kahn's office before testifying.
Kahn was served with a subpoena on Saturday, May 21, 1921,
to appear before a sub-committee' on Monday, May 23rd (Kahn
757). The next day, Sunday, May 22nd, Kahn was at his place
of business. His bookkeeper, Maas, was there and so were two
other men (758).
On Saturday after he was subpoenaed there were three tele-
phone calls from his apartment to his brother-in-law, Isaac Gold-
berg, (Kahn 760; Jones 730 and Reardon 728 & 28, Ex. 51).
After leaving his office on Sunday, Kahn went to Goldberg's
home and spent several hours there (Kahn 760, see a'bove, Kahn's
testimony that he gave the $3,000 to Goldberg). On Sunday
Kahn phoned both to Goldberg and his visiting accountant, Sol.
Goodman (Kahn 761, 762 and Ex. 51).
On Monday morning before testifying Kahn talked with Alder-
man McManus in the 54th Street Court (Kahn 76S&766).
Phone calls by Kahn after testifying.
Kahn finished testifying before the sub-committee at 8 o'clock,
May 23rd. He had claimed that Sam Kern was one of the two men
who was at his place of business on Sunday, May 22nd, but
later admitted the falsity of that testimony. That evening he-
called up Mr. Kern in Tarrytown (762 and Ex. 51) and also the
Thomas J. McManus Association and Sol. Goodman, his ac-
countant. (Kahn 763 & 4; Ex. 51).
Attempt to revoke Kahn's permit after testifying.
After Kahn testified 'before the sub-committee on May 23rd.
he was subpoenaed by the Commissioner of .Accounts and testified
there. This was repeated after he testified before the sub-com-
mittee, on May 25th (Kahn 766). The second time he testified
before the Commissioner of Accounts was on June 2nd. On the
4th of June he received a registered letter notifying him that his
permit had been revoked. He brought an action to restrain such
revocation and obtained a temporary injunction. The disposition
of the case was, by agreement between the parties, delayed pend-
ing the hearings of the Committee and Kahn is now in possession
of the stands.
v
268 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
THE KATENKAMP CASE
Receives Dispossess Notice.
Mrs. Bertha Katenkamp had been conducting a fish stand in
Washington Market under the permit of her husband for about a
year after his death (Katenkamp 844; Minder 832). In August.
19'20, she received a dispossess notice from the Commissioner of
Markets saying that she had no permit to do business in Washing-
ton Market and must vacate on a specific date stated therein
(Katenkamp 845; Minder 833; Eggers 855).
Visit to O'Malley.
As Minder was out of town she conferred with Eggers, the
Vice-President of the Washington Market Merchants' Associa-
tion (Katenkamp 845), who is 'also in the fish business. She had
received three notices from O'Malley to see him about her permit
but she had taken no notice of them (Eggers 856). He (Eggers)
took her to O'Malley. Mr. Turner who also has a fish stand went
with them to adjust his troubles also (Eggers 856; Katenkamp
846). O'Malley said the permit died with her husband (Katen-
kamp 846) and she would have to leave the stand. Mrs. Katen-
kamp and Turner then went into the outer office and waited for
Eggers who remained behind with O'Malley. They waited about
20 minutes. Then he came out and all three left. (Katenkamp
847).
Eggers says O'Malley said Mrs. Katenkamp didn't live in New
York City and many residents wanted to get permits, who ought
to have precedence (-Eggers 858). He absolutely refused to issue
a permit to her.
Eggers Talks with Winters and then with Mrs. Katenkamp.
Eggers had known Winters for several months before he spoke
to Winters about the Katenkamp case. Eggers said to Winters :
" Mrs. Katenkamp is dependent upon the proceeds of this stand.
I would not like to se her put out, isn't there no way of arranging
these matters." Winters said, "No, I want her out
We have someone else for the place " (Eggers 860 & 861). Eggers
said, " What about Turner " ? Winters said, " Well we can fix
that up." Eggers said, " What do you want ?" Winters said
" $500." (860). Winters had a " party that was going to give
Mrs. Katenkamp an amount of money to get out noth-
ing came out of that," (861).
REPORT OF JOINT LEGISLATIVE COMMITTEE 269
Later on Eggers had other talks with Winters. The latter con-
tinued to insist he wanted the widow out. Finally he said he was
going to Washington and " if we could fix it up for a thousand
dollars" after he got back it would be all right (862). Eggers
told this to Mrs. Katenkamp but she said she didn't have the
money (Eggers 862 & Katenkamp 848). Meanwhile Winters was
in sight waiting at Eggers' stand (Katenkamp 848 & 849), which
can be seen clearly as it is obliquely across from Mrs. Katen-
kamp' s (Katenkamp 848 & Eggers 855).
When Winters returned from Washington he asked Eggers
" Well how did you make out." He said, " I can't do anything
with Mrs. Katenkamp, she has not got the money ", Winters said.
"Well, let her get out." (9862).
Eggers said, " Why do you want to put this woman out, she
is dependent upon this for a living." He said, " Well, I will tell
you, we will make it $500." (863).
Eggers told this to Mrs. Katenkamp but she said, " I haven't
got it." Eggers said " Worse and worse, here is where I throw
up my hands." Then Mr. Minder " came into the proposition
and she didn't put up a nickel." (Eggers 863).
Eggers' various conversations with Mrs. Katenkamp took place
" every day in the week for ten days." The talks always took
place in Mrs. Katenkamp' s stand and Winters was always in sight
at Eggers' stand (Mrs. Katenkamp 849).
Minder 's Visits to O'Malley.
Minder was out of town when the permit was revoked and during
the week or ten days that Eggers was handling the matter for
Mrs. Katenkamp (Minder 832 & 833). When he returned the
matter was brought to his attention by various members of the
market. Minder told Eggers to leave the case in his hands. He
did not know Mrs. Katenkamp very well but had known her hus-
band fairly well (Minder 833). Minder then went alone to see
O'Malley and explained to him that he saw no reason why Mrs.
Katenkamp should be put out of the market. "After going into
it very thoroughly with the Commissioner, he said he would give
it further consideration." (Minder 834.) There were two or
more such visits, Minder always going alone. At first O'Malley
said "she had to go ". Minder pleaded her case (837). " I felt
that I had .succeeded, that he had been mislead by people giving
him reports that were not true," (Minder 838).
270 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
Minder Confers with Mrs. Katenkamp and Egger.
Egger reported to Minder his conversations with Winters. He
stated that it: was necessary to leave the matter in the hands of
Winters. Minder said that he had already been to the Commis-
sioner of Markets direct and saw 1 no reason to go through Winters.
Egger said the Katenkamp matter could be settled and the woman
left alone if she would pay $1,000. (Minder 835). She was to
pay it to Egger, not for himself, but for Winters. Minder said.
" Not while I was president of the association would anything
go on like that * * * I called Mr. Egger and Mrs.. Katen-
kamp together to see if there was not some way of breaking down
this attempt to get the widow to pay $1,000 * * * and Mrs.
Katenkamp said that she would be willing to give $500." (Minder
836; also Katenkamp 850). "I told her to bring the $50-0 to
my office * * * she brought me the $500' * * * I had
my bookkeeper take it, it was then in an envelope that had her
name and the date on the back of it and put it in my safe for safe
keeping and I told her that if anyone wanted it to come and ask
me for it. No one came. Afterwards it was returned to Mrs.
Katenkamp." (Minder 836; Katenkamp 850).
Minders Visit to O'Matteys Office, October 4, 1920.
Minder and Mrs. Katenkamp were subpoenaed to appear before
the C'omtmissioner of Accounts on October 4, 1920 (Minder 838
and Katenkamp 850.) Just before appearing, they went to
O'Malley's office (Minder 838). Mrs. Katenkamp waited outside
of O'Malley's office for Minder, who went in and stayed there ten
or fifteen minutes (Katenkamp 850 to 852). Minder told
O'Malley that they were subpoenaed to the Commissioner of
Accounts office. He said he knew it, that the entire matter was
in Hirshfield's hand and we would leave it rest there, that people
were talking about graft, giving newspaper stories out and he was
going to get to the bottom of it. " I told him * that all
this stuff getting into the papers 1 would do harm and would do
harm, to Mrs. Katenkamp * * and would embarrass me,
himself and the 'administration and that while I had no definite
proof that graft was asked for, except by word of mouth, I did
not feel inclined to drag anybody into it * he asked me
whether it was a positive fact that I could say there was a graft
request, I told him I could * * * yet I could not prove it,
that it was unfair to drag Mr. Winters 7 name into it when it
REPORT OF JOINT LEGISLATIVE COMMITTEE 271
wasn't my party. I told him I was going to the Commissioner
of Accounts office and tell the same thing and try to leave out Mr.
Winters' name if I possibly could, because it was to my mind
unfair * * unless I have some specific proof that
I should defame his character * * * he thought that was
mighty nice and if that was the case he thanked me for doing it
* * * I asked him if I could assure Mrs. Katenkamp, who wa&
in the outer hall waiting for me, of that fact, and would she get
her permit and be able to continue her business if she would
follow my instructions and testify and try to leave Mr. Winters'
name out of it before Mr. Hirshfield * * * he assured me
that that would be the case." (Minder 839 & 840).
After testifying Minder returned to O'Malley's office. It was
late in the afternoon. O'Malley was out. " I told him (McGrath)
to tell the commissioner that we had testified before the Com-
missioner of Accounts and I felt that everything would be
allright." (Minder 841). Minder did not tell O'Malley nor
Hirshfield nor anybody in their office that he was holding the
$500. He held it about a week or ten days " inasmuch as Mrs.
Katenkamp was frightened to death for fear she would give it, as
she threatened to do, to have peace as she called it." It has now
been returned to Mrs. Katenkamp. (Minder 842). Mrs. Katen-
kamp did not receive her permit until January 27, 1921.
Commissioner of Accounts' Investigations.
On October 1, 19'20, O'Malley wrote Hirshfield a letter (Com-
mittee Exhi. No. 41) in reference to the Katenkamp case (864).
requesting an investigation because of " ugly rumors that * * *
if she would pay money to some employee of this Department
he would be able to fix the matter up" (866). On
November 27, 192O, O'Malley wrote Hirshfield inquiring as to
the result of the investigation (867). He again wrote on Jan-
uary 3, 1921, to the same effect, stating " it has been and still
is my opinion that Mrs. Katenkamp should vacate this stand
but have taken no action pending a reply from you." (868).
Minder's testimony before Hirshfield on October 4, 1920 (869)
shows that he reluctantly mentioned Winter's name as the one
as to whom there were such "ugly rumors" (871). Mrs. Kat-
enkamp testified " I was not asked to pay. It is rumored around
there that if you want to stay there you have to pay * * *. They
won't ask direct. A gentleman came to me and said if I wanted
*.
272 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
to stay it would cost me money and I said I didn't have any
money * * * First a Mr. Turner came. He said he under-
stood I would have to pay * * *. He didn't mention any
names" (879). Asked if anyone else told her anything about
paying, she said " No " (880). Neither Turner nor Winter
were examined. (88-2).
On January 22, 1921, Hirshfield submitted his report to the
Mayor (882), suppressing the fact that Winter's name was men-
tioned in the testimony (883). He concluded " Nothing has
been disclosed from the examination to sustain the assertion that
moneys had been demanded or received by any employee of the
Department" (884). He recommended that Mrs. Katenkamp
be allowed to continue the occupancy of the stand (885). On
January 26, 1921, O'Malley acknowledged receipt of a copy of
this report and wrote " Your suggestion as to allowing Mrs. Kat-
enkamp to remain in occupancy of this stand will be followed."
(886).
THE TURNER CASE
Egger and Turner Visit O'Malley.
James E. Turner, as well as Mrs. Katenkamp, came to Egger
" with his troubles." He had also received a notice to vacate.
He had succeeded to his uncle's business. His uncle had had
a permit for many years, but he had none. Egger is not sure
whether Turner had received a notice to vacate or not (Egger
856 & 7). Turner and Mrs. Katenkamp both went with Egger
at the same time to see O'Malley (Egger 898). (Turner 967).
O^Malley refused to issue him a permit because he lived in Jer-
sey City (Turner 968).
Egger's Talk with Winters.
Later when Egger was talking to Winter about Mrs. Katen-
kamp's case he said " What about Turner ? " Winter said, " Well,
we can fix that up." E'gger said, " What do you want, " Win-
ter said " $500." (Egger 860). Egger told Turner that if he
wanted to stay in the market he would have to put up $500.
" So I took Winter over to Mr. Turner and said ' Jim meet
Mr. Winter,' and he met him and that was all." (Egger 860-
861).
Turner's First Talk with Winters.
This introduction took place about one wtek after Turner,
Egger and Mrs. Katenkamp had been at O'Malley's office
REPOKT OF JOINT LEGISLATIVE COMMITTEE 273
(Turner 972). Egger had told Turner that Winter had said
Turner would have to pay $500. (Turner 974). Turner claims
he told Winter as well as Egger that he would fight the matter
in the courts (975).
Turner Gets His Permit.
Later he told Egger that it would probably cost him $1,000 in
the courts and that as long as his daughter was sick he would! as
soon pay $500 to Winter to get his permit (976). Then Winter
came and told Turner the permit was ready and he should go up
and get it (977).
Turner Pays $500 to Winters.
A couple of days after he got his permit Turner paid Winter
$500 in bills at Broadway in front of 176 Broadway (977-980).
He took the money from his receipts (977). He made no book
entry of this item (978). This was in August, 1920, about 1
o'clock. Ete made the appointment with Winters about an hour
earlier at the market (979). Winters suggested the place (981).
Turner said, " Here is a present for you for what you done for
me" (981).
THE CASE OF BARNET COHEIT
Barnet Cohen was in the live poultry business at 39 and 41
Loew Avenue, West Washington Market, first in connection with
Harry Bail, Inc. and then as a member of the firm of Cohen and
Jacobs (Cohen 929). When that firm got into difficulties, Com-
missioner O'Malley sent for its members in March 1920. Cohen
responded and O'Malley induced him to surrender the permit for
the Loew Avenue stands, which were given to one Rothberg, on
the promise that Cohen would receive a permit for certain other
stands then held by a saloonkeeper (Cohen 930-32).
Cohen called repeatedly at the Commissioner's office to get the
promised permit but without success. One Thursday O'Malley
called Cohen at his home by phone and told Cohen td come to his
office the next day, Friday. Cohen went and waited all day.
(Cohen 933).
O'Malley gives Cohen an Auto ride.
After waiting all day O'Malley told Cohen he would give him
a ride in the machine. (Cohen 933). Cohen took a machine
ride with O'Malley. The machine was waiting at the Municipal
A
271 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
Building. They rode up to 48th Street and Broadway, O'Malley
and Cohen in the car. (Cohen 934). Both left the car at 48th
Street, (Cohen 935). During the ride to 48th Street O'Malley
asked Cohen how much money he had to invest and was told Cohen
could get $10,000 from his brother-in-law. O'Malley said to see
him next week. (Cohen 933).
llillman comes into the Case.
The following Monday or Tuesday, Cohen called at the De-
partment of Markets and spoke to McGrath, secretary to Com-
missioner O'Malley. McGrath told him that one Hillman, a
member of a firm which held stands in the market, was with the
Commissioner " too many times " and that the Commissioner had
told McGrath, " I give it away to Hillman them stands."
(Cohen 935). The same day when MdGrath told Cohen about
Hillman's getting the stands (of the saloonkeeper), Cohen went
to Commissioner O'Malley and asked about it O'Malley told
Cohen the stands were given to Hillman " because you (Cohen)
wasn't such a good customer for me." (Cohen 936). O'Malley
had suggested that Cohen and one Price (Cohen 937), Hillman's
brother-in-law, should together occupy these stands (Cohen 938).
O'Malley also told Cohen people offered him money for the
stands. (Cohen 939);
Cohen Tells Price about O'Malley's Suggestion.
Cohen told Price that O'Malley suggested that Cohen and Price
get the stands together and begged him to " Have a heart." Price
told Cohen to go to Mr. Hillman, Price's brother-in-law and that
whatever Hillman said Price would do. (Cohen 945).
" For Money I got Honey."
Cohen went to Hillman with his story and Hillman, referring
to the stands obtained by him for Price said to Cohen, " For
money I got honey." (Cohen 946).
O'Malley objected to Cohen because he said Cohen voted Re-
publican, so Cohen was told by O'Malley and by others (Cohen
846). But Cohen is a member of the Thomas M. Farley Associa-
tion and is a member of the regular Democratic organization
(Cohen 947).
Cohens Vain Appeal to the Commissioner of Accounts.
Cohen appealed to the Commissioner of Accounts and was re-
ferred to Mr. Klein. Klein told Cohen he could not do anything
EEPORT OF JOINT LEGISLATIVE COMMITTEE 275
for him (Cohen 949). Klein told him to see Commissioner
Hirshfield. Cohen went to Commissioner Hirshfield and
when Hirshfield saw him he would go through some
door into another room, so Cohen could not see him. Cohen had
been to the office a great number of times (Cohen 950). Finally
he spoke to a man in the office of Hirshfield he thinks Mr. Mc-
Ginley, Chief of 'Staff, and Cohen was told to put his story on
paper and it would be presented to Hirshfield, and a report made
to the Mayor or to the Commissioner of Markets. Cohen came
back a few days later and was told "Hirshfield did not want to
sign the papers for you we cannot do anything for you. v
Cohen wanted to see Hirshfield and Hirshfield told the officer to
" Throw him out, that crook, from this building." (Cohen 950).
Hirshfield had on a previous occasion found Cohen's testimony
against Dr. Day credible and in still another investigation by
Hirshfield's office one of his subordinates reported that O'Malley
admitted that he had suggested that Cohen and Price should join
in the occupancy of market stands.
THE LEWIS CASES
George H. Lewis & Son Inc. originally had seven stands in
West Washington Market 43, 45, 47, 49 Grace Avenue and
44, 46, 48 Thompson Avenue, for which the corporation received
permits (Lewis 984). They acquired three more stands 25,
27, 29 Lawton Avenue from F. H. Fechtman & Co. Inc.
These stands are about lO'O feet removed from the other seven
stands held by Lewis (Lewis 986).
When the stands were acquired from Fechtman an application
was made by Lewis & Sons Inc. through its vice president, John
L. Luger, to the Department of Markets for permits and permis-
sion to effect the transfer from the Fechtman Company to Lewis.
Luger said he thought it would cost him $300 to have the trans-
fer made. (Lewis 990).
Lewis pays Luger $300.
Lewis paid Luger $300 on September 27, 1920 to have the
transfer of the Fechtman stands effected (Lewis 990). Luger did
not tell lewis what the $300 was for (Lewis 991). In four or
five days, the permit desired was issued (Lewis 992).
Inspector Winters in -the Case.
When Fechtman wanted to sell the stands Luger said some sort
of investigation would be made. Lewis saw Inspector Winters
276 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
around the market and Fechtman told Lewis that Winters had
called on him (Lewis 992).
Permit No. 416 was issued October 1, 1920 to G. H. Lewis &
Sons Co. Inc., for stands No. 25, 27, 29 Lawton Avenue, West
Washington Market at a rental of $27.50' weekly. Receipt signed
by G. Hi Lewis, & Sons Inc., John L. Luger, vice president; wit-
ness Charles A. Winter.
Lewis sells a Stand to Benjamin.
The sale of one stand by Lewis to Mr. Benjamin of West Wash-
ington Hotel Supply Company cost $350 (paid by Lewis) for the
transfer of the permit. Luger attended to the transfer (Lewis
993). receiving $350 from Lewis to effect it.
Luger tells Lewis of his Political Affiliations.
Luger told Lewis he was a member of some political organiza-
tion and through that he would be able to get the transfer put
through. (Lewis 994). He did.
A Third Transfer Effected by Luger.
Luger told Lewis it would cost $1,000 to 1 get approval of a
transfer of stands from Lewis to Dorato Cerutti Company. Lewis
paid Luger the $1,000 oil April 13, 1921 in cash for this purpose
and the transfer was effected the same day.
Luger 3 s Connections and Admissions.
John L. Luger was vice president of George H. Lewis & Sons
Inc. on a salary of $75 a week (Luger 999).
Luger admits getting from Lewis $300 and $350 in connection,
respectively, with Fechtman and Benjamin transfers (Luger
999). He also admits getting $1,000 with reference to the third
transfer (Luger 1,000). Luger knew Inspector Winter of De-
partment of Markets for about 1 year (Luger 1,000).
Luger is a member of the Tammany Hall General Com-
mittee and of the Peter J. Dooling Association (Luger 1,000).
He had been a district captain for three s or four years prior to
working for Lewis & Sons (Luger 1,000) and a member of Dool-
ing Club for five years.
sees O f Motley Re Fechtman Transfer.
Luger called on O'Malley at the Department of Markets and
asked for transfer of Fechtman stands to Lewis (Luger 1002).
EEPORT OF JOINT LEGISLATIVE COMMITTEE 277
O'Malley refused because Lewis already had seven stands.
(Luger 1003). After O'Malley' s refusal Luger went to the Peter
J. DooKng Association and told his troubles to 1 John Burke, secre-
tary of the club, and Burke suggested that Luger and he call on
O'Malley (Luger 1004).
Mr. Burke and Luger called on O'Malley and Burke told
O'Malley that Luger was an active worker in the organization,
and he, Burke> thought Luger was entitled to be favored with the
transfer (Luger 1005). O'Malley still mentioned about the seven
stands already held by Lewis and Burke and Luger left (Luger
1005).
Permit Obtained next Morning.
The next morning Mr. Burke went back to see O'Malley. He
told Luger he had been there. Then Luger went to see O'Malley
(Luger 1006). O'Malley told Luger he would get the transfer of
the permit because he was an active worker for the organization
and the permit was issued. Winter signed the permit as a witness
(Luger 1006), having previously called at the market to investi-
gate and spoken to Luger while there and having recommended the
approval of the transfer in his report dated September 27th, the
same day as Luger received the $300 payment.
Luger on the Benjamin Transfer.
Luger originally applied to the Department of Markets for
permission to* have Benjamin store materials in one of Lewis 7
stands by letter dated November 13, 1920 (Luger 1010).
Winter made a report to O'Malley six days later suggesting that
permission could be granted and the purpose effected by transfer
of the stand from Lewis to Benjamin (Luger 1011). Luger
waited for an answer to his letter and then called at the Depart-
ment of Markets (Luger 1011). He spoke to O'Malley, telling
him a personal friend of his (Luger's) wanted the stand and asked
for the transfer (Luger 1012). He had two or three conversa-
tions with O'Malley on the subject and then finally obtained the
permit for transfer to Benjamin (Luger 1013). In this connec-
tion he got $350 from Lewis (Luger 1013).
Luger also Handles the Third Transfer.
In March Lewis wanted to sell four more stands and told Luger
so (Luger 1013).
A
278 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
Luger went to the Department of Markets and spoke to
O'Malley and " when he seen me he was fit to be tied/' (Luger
1014).
Luger again Appeals to his Political Club.
Luger went to the Peter J. Dooling Association and arranged
to meet Mr. Dooling, who was to go with him to the Department
of Markets. They went the next day and both called on O'Malley
(Luger 1015). O'Malley again refused to do anything for Luger
(Luger 1015).
Luger appealed to Dooling to help all he could and then Dooling
told Luger to go again to the Department of Markets with his
old permit. When he saw O'Malley he was told by O'Malley
that he had reconsidered the matter and the transfers were
approved. (Luger 1016).
Luger Secured the Permit about April 12, 1921.
On April 13th, Lewis drew two checks one for $500 and the
other for $300, making a total of $800, which were cashed and
with an additional $200, the three checks amounted to $1,000-,
all of which was given to Luger (Luger 1019). The transfers
were effected the same day and Luger says he contributed $500
the next day to the Irish Fund, of which Mr. Burke, the club
secretary, was treasurer for his district (1020 1 ). Records show
that of a total of $800 contributed to the club for this fund, Luger
is credited with a contribution of $500 (Luger 1022), the other
contributions being in nearly all cases, one dollar each. When
first examined before a sub-committee Luger had no receipt for
his contribution, but afterwards obtained one dated April 14,
19'21 (Luger 1021). This receipt was the last in the book from
which it was drawn, the book bearing the name of a person other
than Burke, who signed the receipt, and many receipt books,
admitted to have been received from the central office of the Fund
organization, being missing or destroyed.
THE MICHELS TELEPHONE COMPANY CASE
B. Michels Sons Co. Inc., is the holder of a permit for stand
11-R-22-R, in Washington Market, issued July 1, 1919. (H. F.
Michels 1081). The corporation had been in business five or six
years and prior to that the stands had for a great many years been
held by a partnership composed of same people. (Michel
1081-82).
The Washington Markets stands were too small for the busi-
REPOKT OF JOINT LEGISLATIVE COMMITTEE 279
ness so that the corporation rented and later bought the building
at 108 Vesey Street. The purpose of buying the building at 108
Vesey Street was not to resell it, but to use it as a storeroom,
ice box, etc., for the business (Michel 10*83).
The New York Telephone Company, through its agent, wanted
to buy the Vesey Street building and Michel referred them to his
real estate agent, Mr. Hibbard (Michel 1084).
Michel told Hibbard that he would rather keep the building
than sell for $60,000 as he needed it for business purposes. Also
Michel told this to the representative of the telephone company
(Michel 1084). This occurred about one month after Michel
had bought the building (Michel 10-85).
After Michel's refusal to sell he heard that O'Malley wanted
him at his office, for an interview. Michel went to O'Malley's
office and the Commissioner asked him why he had stands in the
market and a store across the street (Michel 1085). Also what
right did Michel have to a stand as he lived in New Jersey (Michel
1086).
Michel had read and knew about the revocation of permits for
stands in the markets.
Second Interview with O'Malley.
The next day Michel took his agent, Hibbard, to O'Malley's
office. At first O'Malley wanted to talk to Michel alone, but
Michel insisted on Hibbard's presence and he was called in
(Michel 1088). Michel told O'Malley, Hibbard represented him
in all transactions for the building (Michel 1090). Michel had
decided he must sell the building to stay in the market. His
testimony is as follows:
" Q. Had you told Mr. Hibbard to negotiate for the sale of
this building? A. Mr. Hibbard had my approval of that.
Q. Well, what made you change your mind about it. I
thought you didn't want to sell it ? A. If it had to be sold
I had to get the best figure I could get for it.
Q. Why did it have to be sold ? A. Because I wanted to
stay in the market.
Q. Because you wanted to stay in West Washington
Market? Yes." (Michel 1089).
Telephone Company had Done O'Malley "A Great Many Favors/'
At the second interview, November 17 or 18, 1920, O'Malley
said to Michel and Hibbard, " The telephone company has done
A,
280 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
me a great many favors and we want that building. We got to
have that 'building. 77 Michel then left and Hibbard remained
along with O'Malley (Michel 1092).
The contract for the sale of the property by Michel to telephone
company for $45,000 was made January 7, 1921 (1093).
On January 7, 1921, Michel drew check for $3,000 to Cash or
J. B. Hibbard, cashed it at the bank, received six $500 bills, which
he gave to Hibbard as his commission. (Michel 1094). The
deed to the telephone company was executed on January 31, 1921.
(Michel 1095).
Hibbard on November 18th, accompanied Michel to O'Malley's
office. First Michel went in alone; then Hibbard was called in.
Hibbard told O'Malley that if he wanted to talk about the Vesey
Street building he did not need Michel, that Hibbard was taking
care of that for Michel (Hibbard 1101). Michel then went out
and Hibbard and O'Malley remained alone. (Hibbard 1102).
The testimony is:
" Q. What did you say to Commissioner O'Malley ? A. I
asked him he told me that he was under obligations to the
telephone company; they had done a great many favors for
him and they had asked him to see if he could get possession
of that property for them.
Q. At 108 Vesey Street ? A. At 108 Vesey Street.
Q. Did he say who it was representing the telephone com-
pany? A. Yes.
Q. Who? A. McHarg.
Q. Did he say whether or not he had previously been ac-
quainted with Mr. McHarg ? A. I think he did I think
he said McHarg had done a number of favors for him."
(Hibbard 1102).
Hibbard Promises O'Malley Share of Commission.
Hibbard asked O'Malley if he intended to " put the screws on
Michel" about his market stand and O'Malley said "No," but
he did want to do something for the telephone company ; so Hib-
bard said, " We will make the telephone company pay a little more
money, and I shall charge a. little more commission and you will
get your share of it." (Hibbard 1103). Michel's written offer
to sell the property for $45,000 was received by O'Malley.
On January 7th, after the contract for the sale was signed
Hibbard went with MicheLto the bank, where a check for $3,000
was cashed and Hibbard received the six $500 bills (Hibbard
1104).
REPORT OF JOINT LEGISLATIVE COMMITTEE 281
Hibbard Gives 0' Medley $1,500.
After leaving the bank Hibbard walked to O'Malley's office.
The testimony is :
" Q. Did you see Mr. O'Malley ? A. I did.
Q. What took place in that conversation? A. I simply
to ] d him that we had signed the contracts and I received my
commission and I thought he was entitled to three of the six
bills I showed him.
Q. Did you give them to him ? A. I did.
Q. Three $500 bills? A. Yes, sir.
Q. Anything else said in the conversation? A. No, we
had a general talk." (Hibbard 1104-1105).
O'Malley's Testimony.
Before fleeing from the witness stand, O'Malley answered some
questions in relation to this transaction as follows :
" Q. Do you know John B. Hibbard ? A. Yes, sir.
Q. Did you get $1,500 from him? A. No, sir.
Q. Never received any money from him? A. I did not
receive it. (O'Malley 1179).
Q. Did McHarg ask you to assist the telephone company
in getting property at 108 Vesey Street ? A. Yes, sir.
Q. Did you send for Michel ? A. Yes, sir.
Q. Did you advise him to sell the property ? A. I told him
of the proposition.
Q. Did you get from Mr. Michel a written offer to sell the
property for $45,000? A. No, sir.
Q. Didn't you give it to McHarg? A. Yes, sir, I didn't
get it from Michel.
Q. Did you get it from Hibbard ? A. Yes, sir.
Q. You gave it to Mr. McHarg? A. Yes, sir, I called
up Mr. McHarg and he came to my office and I gave it to
him." (O'Malley 1180).
O'Malley further testified that McHarg told him he wanted
O'Malley to talk to Michel about the building, because the tele-
phone company had been unable to get a definite offer of sale
from Michel and they needed the property to complete a square
b ] ock for the telephone company (O'Malley 1182). O'Malley told
McHarg " I will find out from him (Michel) if I can. I will
send for him and ask him just what he means to do and let you
A
282 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
know if that will help you." (O'Malley 118-3). O'Malley tes-
tified McHarg had done some favors for him and that he had
known him possibly a year (O'Malley 1184). O'Malley admitted
he sent for Michel to come to his office and then talked to him
about the Vesey Street property. Michel told O'Malley the piece
of property was in the hands of his agent (O'Malley 1186), and
that Michel would have his agent see O'Malley about the matter
(O'Malley 1187).
MARKET SUPERVISORS
A curious sort of institution established by the market adminis-
tration was that of " Market Supervisors." To reduce the cost
of food to the people, the Board of Aldermen was induced to
establish a number of open air markets for pushcart and wagon
peddlers in the streets of the city. The object in legally estab-
lishing the markets, many of which had previously existed on
sufferance, was to end the opportunity for petty graft alleged to
have been levied by policemen and others upon the pretext that
the hucksters were blocking traffic or littering the streets. The
opportunity of the legal markets was, however, seized upon to
create also a new and officially sanctioned kind of graft.
The a Market Supervisors " are not city officials or employees,
being in no class of the civil service and being without place upon
the payroll. They have been appointed by the Market Depart-
ment usually on the nomination of a Tammany district leader.
Their jurisdiction is to approve the application of peddlers who
desire places in the markets and to see that they are kept clean.
For that purpose they have assistants nominated in the same way.
Their compensation comes from the fee of $1 per week or 50 cents
per day, which they in person collect from each peddler in the
market and keep as their own, except for disbursements to helpers.
The attendance in the various markets varies from 31 to 375
peddlers per day. The alleged expenses of the supervisors are
subject to doubt, but in any event, their admitted receipts are
substantial.
The vice of such a system is obvious. The admitted graft is
bad enough. The opportunity for additional levy is clear and the
absence of official responsibility invites the exploitation of such
opportunity.
Clearly, if such markets need supervisors, they should be
regular city officials or employees and the fee paid by the peddlers
should go to the city.
REPORT OF JOINT LEGISLATIVE COMMITTEE 283
SALE OF ARMY AND NAVY FOOD SUPPLIES
While O'Malley was deputy commissioner of Public Markets
under Dr. Day, he had an active part beginning in July, 1919, in
the distribution in New York City of surplus food supplies remain-
ing in the possession of the War and Navy Departments after the
Armistice. The purpose of the Federal Government in enabling
these foodstuffs to be distributed by municipal agents was to place
the same within the reach of the general public, especially the
poor, at just enough over the low prices charged by the govern-
ment, to pay the cost of distribution. However, under the scheme
of distribution in New York, in which O'Malley had a very im-
portant part, not only were large quantities of choice foodstuffs
made available to high priced hotels instead of to the public gen-
erally or the poor, but the margin of profit was fixed so high that
on the handling of goods costing $2,831,183.26 there was a gross
profit of $796,199.94.
That enormous gross profit has never been fully accounted for
and $38,257.36 has been totally unaccounted for. Of the balance,
certain items of expenditure are conspicuous. Commissioner
Day and Deputy Commissioners O'Malley, Smith and Mulry paid
themselves compensation out of this fund at the rate of $20 a
day, to the total sum of $7,340, in addition to their regular city
salaries. Hosts of city employees, policemen, clerks and others,
received extra compensation from the fund though working on
city time and receiving their regular city pay. Trucking charges
amounted to $144,480.15, large portions of which went to a
political friend of the administration and to a neighbor of
O'Malley 's without competition and at rates that allowed them
a profit on trucks hired by them, which the administration could
have hired at the same rates as the favored contractors. The
latter's profits ranged as high as $6 per day per truck. Three
hundred thousand dollars of the surplus was turned over to a
Special Committee for charitable purposes, but $50,000 of that
amount was later paid to persons, whom the administration had
loudly proclaimed to be volunteer workers during the distribution
and whom the Commissioner of Accounts had, after investigating,
savagely denounced, as seeking pay to which they were not enti-
tled. Altogether, here, as in the routine administration of the
Market Department, the touch of its officials was attended by the
taint of incompetence, waste, favoritism and corruption.
284 INVESTIGATION OF AFFAIRS OF NEW YORK CITY
DEPARTMENT OF PUBLIC WELFARE KINGS
COUNTY HOSPITAL JOB
An illuminating example of the futility of law and ordinance
to compel an honest and efficient administration of government
is disclosed by the Committee's investigation of the conspiracy to
defraud the city in connection with the proposed installation of
an oil burning heating and power plant in the Kings County Hos-
pital under the jurisdiction of the Department of Public Welfare
(formerly the Department of Public Charities). There is every
reason to believe that the conspiracy would have been successful
but for the committee's exposure of the facts. Alderman Charles
A. McManus and his brother, former Senator Thomas J. Mc-
Manus, were the persons with " influence/' for which they were
to be paid, sufficient to circumvent the law as to competition for
public work. A " shoe string " company was to get the contract
at a profit of over 100 per cent and " competition " was to be
"encouraged" by the official use of plans and specifications
formulated by the insiders. Even then if competition became
dangerous, the insiders were to be pre^advised of the bid which
must be met.
The testimony upon the subject shows the following: In May.
1921, Irving Cohn, Dr. Gustavo New and Edward A. Pierce
started in the oil burning installation business under the name of
" Terminal Engineering Company." Pierce and Cohn had no
previous experience in oil burning installations. Kings County
Hospital was the first public building in which the new concern
became interested.
During the war, Dr. New, who is an engineer, had charge of
inspecting steel mills all over the United States and installing oil
burning systems in furnaces. He became acquainted with Pierce
in January, 1921, and rented desk room in his suite of offices,
from which he endeavored to secure contracts to install oil burn-
ing heat and power plants. Pierce proposed that they go into
business together, taking a third man, Cohn, in with them.
Pierce took up the question of getting an introduction to Com-
missioner Coler with Senator McManus. McManus became asso-
ciated with Pierce in the business. He became financially inter-
ested in the matter by an -agreement dated July 29, 1921, among
Pierce, Alexander, Cohn and McManus. They agreed to form a
corporation which was to be called the " Oil Burning Installation
REPORT OF JOINT LEGISLATIVE COMMITTEE 285
Company." McManus was to get 24% per cent of the stock with-
out paying anything for it. He was to use his influence to intro-
duce them to men who would consider burning oil, particularly in
public buildings.
Pierce and Cohn had called upon Coler concerning installing
a plant in the Kings County Hospital. Senator McManus also
went to see Coler about it.
Early in 1918 the Department of Public Welfare had looked
into oil burning and had decided it was too expensive. The Mc-
Manus group brought the Singer Building plant to Mr. Coler's
attention. He inspected it with them and concluded that it
embodied the best means for any hospital to get rid of dust and
dirt. Having written his decision as to policy he then turned the
matter over to his engineers to estimate the cost. A verbal report
was submitted by Chief Engineer Herrick.
The Terminal Engineering Company was permitted to study
the feasability of installing such a plant in the Kings County
Hospital. Senator McManus at Pierce's request took up with
Mr. Coler the matter of having Dr. New examine the Hospital
plant, with a view to making an oil installation.
On May 19, 19-21, the Terminal Engineering Company wrote
that it would install a plant in the Kings County Hospital for
$47,500.
New had suggested $35,000 or $38,000 as the price. Pierce
and Cohn said that was too low, because they would have to take
care of the " people who were going to help us bring the job off.' 7
The company again wrote Mr. Coler on June 2nd, and June 6,
1921.
Coler testifies that he did not know that Buxton, the engineer
who had shown him the Singer Building plant, was interested in
the Terminal Engineering Company. As a matter of fact he was
to receive 5 per cent of the profits. Buxton made a favorable re-
port to Mr. Coler concerning the Kings County Hospital plan
which report was enclosed with the letter of June 2nd from the
Terminal Co. A blue print, showing the proposed layout, was
submited with the letter of June 6th.
The department took the blue prints furnished by the Terminal
Engineering Company and filed these identical blue prints with
the Fire Department. The specifications were partly drawn in
the office of the Terminal Engineering Company. All the speci-
fications for the Kings County Hospital job were typewritten in
286 INVESTIGATION OF AFFAIES OF NEW YORK CITY
the office of the Terminal Engineering Company and Chief Engi-
neer Herrick's name was placed on the first page.
The company again wrote the Department on June 23rd, this
time addressing Deputy Commissioner McStay and offering this
time to install the system for $62,500'. A skilled engineer exam-
ining the blue print of the proposed lay-out, sent with the letter
of June 6th, would have known that the price of $62,500 was about
$25,000 too much. For this amount Mr. Coler applied to the
Board of Aldermen for Special Revenue Bonds. He could not
explain why the amount was raised from $47,500 but said he took
his engineer's judgment on that.
Pierce calculated that the installation at the Kings County Hos-
pital would cost the Terminal Engineering Company about
$40,000. Dr. New figured it at $30,000. One of the "pros-
pects " listed to be turned over by the Terminal Engineering
Company to the Oil Burning Installation Company upon its
organization was the Kings County Hospital plant. The memo-
randum read " approximate contract price $62,500 ; approxi-
mate cost $26,000; approximate profit $36,500."
Deputy Commissioner McStay testified that the first estimate
was based on tanks for 36,000 gallons and that then it was found
that it required another tank in order to have a surplus. How-
ever, there was no explanation of this in any of the correspon-
dence. Pierce endeavored to explain the matter in another way.
He testified that after the $47,500 bid the tanks as planned were
enlarged to 12 ft. by 44 ft. though not increasing the number.
But Dr. New testified that what really happened was this :
The day before New wrote the letter of June 23rd and while
getting ready to dictate to ex-Senator McManus, Cohn, Pierce and
Staley were in Pierce 7 s inner office. Pierce and Cohn told New
to make the price higher than $47,500. New objected. Cohn said
to put in $62,500. Pierce showed New a piece of paper which
New had just before seen in McManus 7 hands. Pierce said,
" You see here is a list of what we have to give for graft." On
the paper was written :
Me 2 $10,000
B 3,000
T. S. & E. Co 3,000
K 200 (or $1200).
Murph 300
St 1,500
REPORT OF JOINT LEGISLATIVE COMMITTEE 287
Pierce said " Me 2 " stood for the two McManuses and that
" B " was some Tammany Hall man. The slip was passed around
the table and came to New and he retained it.
On June 29, 1921 Coler wrote the Board of Aldermen request-
ing authorization of $62,500 of Special Revenue Bonds for in-
stalling an oil fuel system under the boilers in the powerhouse
of Kings County Hospital. He wished to extend this service to
the various institutions of the deparment, particularly those on
Randall's Island. The letter was dictated by Herrick, who is
Chief Engineer of the department. The enumeration of ad-
vantages therein was substantially the same as those set forth in
Mr. Buxton's report attached to the letter of June 2nd, 1921 from
Terminal Engineering Company to Coler.
The City Record of July 14th shows that Alderman McManus
offered a resolution, which was made a special order for the day,
to the effect that the request previously received from Commis-
sioner Coler, dated June 28, 1921, be granted. The resolution
was unanimously passed. At this meeting, beside Alderman Mc-
Manus, ex-Senator McManus, McStay, Coler, Buxton, New and
Pierce were present.
Alderman McManus had previously helped with the name of the
new company. Pierce had met the Alderman shortly after he
met the Senator. The Alderman was in Albany when the in-
corporation papers were to be submitted to the Secretary of State.
Pierce talked with him over the phone and also wrote him about
submitting a list of alternative names to the Secretary of State.
The letter ended, " Hop to it old kid and let us have some action."
After the vote of the Aldermen, Pierce wired his brother-in-law
" Contract closed satisfactorily."
The next day, after the Aldermanic vote, Amos T. Smith, an
engineer in the office of Secretary of the Board of Estimate, called
Dr. New up and said he wanted to see him. He said, " How did
you arrive at $62,500 " ? At that point Mr. Pierce took up the
conversation. A few days later New, Pierce, Staley and Buxton
all went to see Smith by appointment. Buxton and Smith
went over the whole matter. New tried to speak but Pierce
signalled to him to keep quiet and himself got into an argument
with Smith and Smith said, " You are talking a lot of bull."
New later heard them ask who Smith was and what could be done
to make him keep quiet.
The request for Special Revenue bonds had been referred to
*,
288 INVESTIGATION OF AFFAIES OF NEW YORK CITY
Smith for advice to the Board of Estimate, while he was away
on vacation. On his return he took the matter. up, but he never
made a report 011 it. Nevertheless the Board of Estimate took
final action approving the application even though the Committee
on Finance and Budget, to which the matter had been referred,
had submitted no report.
Pierce wrote New on August 6th, " I am preparing all of the
specifications and blue prints for the city job and they are in turn
going to establish my specifications and drawings which are the
tracings themseives as their own, or in other words as though they
had originated, them and not us.' 7
Pierce attempted to tear up the following letter of August 5th
when it was subpoenaed. It was addressed to his brother-in-law
and read in part : " We applied for a closed letting but were
not successful therefore, it is necessary that specifica-
tions and blue prints be drawn in order that all can
figure on the job * * *. Regardless of what their figure is,
our price will be the lowest as we will be pre-ad vised."
On August 26th, 1921 Coler submitted specifications for the
Kings County Hospital oil burning plant to the Bureau of Build-
ings for their approval. On September 9th he wrote to them,
" It is my wish to have this installation begun as quickly as pos-
sible." This letter (and presumably the previous one) was sent
to the Manhattan Bureau instead of the Brooklyn one. On Sep-
tember 19th the Acting First Deputy Commissioner of his de-
partment wrote the Brooklyn Bureau forwarding to them dupli-
cate specifications for the Kings County Hospital installation.
There was some delay due to somebody losing the duplicate plans.
On September 30th a letter was again sent to the Brooklyn Bureau
saying " Commissioner Coler is very anxious that this installation
be begun before the end of the year." Again on October 4th the
First Deputy Commissioner wrote calling attention to the fact
that the appropriation would lapse unless the matter was ex-
pedited, as it still had to go to the Bureau of Fire Prevention,
the Mayor and the Board of Estimate. Finally on October 4th
the department was notified that the plans had been approved.
At this point the Committee's interest in the matter terminated
it. Pierce and his Oil Burning Installation Company have dis-
appeared.
YC 36270