Camden Courier-Post – February 28, 1936
Hartmann Charges Bennett Agreed to Drop 60 Plan Of Refunding
REVENUE CHIEF MAKES HOT DENIAL
New Applicant for Post as Consultant Interviewed
By W. OLIVER KINCANNON
Camden City Commission failed again yesterday to settle the question: Who will be Camden’s financial adviser?
A meeting called to settle the point yesterday was adjourned until 2 p. m. today over the violent protest of Commissioner Harold W. Bennett, director of revenue and finance.
Among the surprises of the meeting was the statement by Commissioner Frank J. Hartmann, Jr., that Commissioner Harold W. Bennett, director of revenue and finance, and Mayor Frederick von Nieda agreed Tuesday to abandon Chapter 60 as the basis for refunding the city’s indebtedness and making the 1936 budget.
Bennett Makes Denial
Bennett denied this vehemently, but Hartmann, after the meeting, said:
I don’t care how much he denies it. He and the mayor agreed to yield on that point. Mr. Bennett is not going to get away with telling me one thing in a private conference and saying another for purposes of appealing to the public.”
Hartmann’s charge attracted unusual attention due to the fact Bennett has held out from the first mention of refunding of Chapter 60 — a rigid and stringent law requiring the city to maintain a cash basis of pay-as-you-go operations, under strict state supervision, for a minimum of 20 years.
Hartmann said Bennett and von Nieda agreed to “go along” on the less stringent provisions of Chapter 77, bolstered by local assurances that would give bondholders virtually the same guarantees they would receive under Chapter 60, but with out invoking upon the city the strict and long-term regulation by state authorities.
Another Applicant
Commissioner George E. Brunner asked for yesterday’s adjournment on the ground that another man or agency, whom the commissioners had not interviewed, desired to present a proposal to the commissioners yesterday afternoon.
Bennett objected that noon Tuesday was the deadline set for applications and said they are closed as far as he is concerned. He took the position it would be unethical to consider any more applications for the job, and delivered this ultimatum:
“I refuse to accept any responsibility for any further delay in making Camden’s 1936 budget and refunding plan. Let’s settle it now.”
Nevertheless, the other four commissioners interviewed the new applicant at 5 p. m. and may consult another today.
The new seeker of the post of official fiscal adviser is George S. Burgess, president of the State Service Bureau, which publishes the Legislative Index for New Jersey and the New Jersey Municipal Reporter, and also supplies a municipal financial information service to hundreds of officials, including, Burgess said, the state auditor, Walter R. Darby.
Burgess is credited with devising and placing in operation the municipal accounting system in Massachusetts and with setting up the system of accounting by which the War Department settled war contracts, and represented the War Department in litigation involving numerous problems of accounting.
Opposes Chapter 80
Burgess is revealed as opposed to Chapter 60 for most municipalities. He is quoted in one of his own publications as saying:
“The Barbour bill (Chapter 50, 1934) is an ideal conception for sound municipal financing, but few places can operate under it until their tax collections increase decidedly. The earning power of the people in a large number of municipalities is far short of such a possibility.”
He listed as the municipal finance advisory board of his concern the following men:
William H. Albright, New Jersey State Treasurer, as chairman of the board, Senator John C. Barbour (sponsor of Chapter 60), of Passaic county, president of the State Senate, Raymond M. Greer, Comptroller of Jersey City and member of a New York firm of accountants, Arthur N. Pierson, treasurer of Union county, Samuel S. Kenworthy, executive secretary of the New Jersey State League of Municipalities.
Promises Price Today
Burgess did not submit a price on his services but told the commissioners he will submit one by 1 p.m. today or before that time.
He informed the commissioners his firm is serving four municipalities in New Jersey as financial adviser now and said his experience covers many similar services to Massachusetts' cities.
Burgess also said he understands budget-making and financial practices on a big scale, partly through serving after the World War as consulting auditor for the War Department, reporting directly to General Herbert M. Lord, then director of finances for the War Department and subsequently director of the budget for the United States.
It was indicated by the commissioners another man may be interviewed today on an application to be adviser for the city.
The interview with Burgess followed a hectic meeting in which numerous charges were hurled and the commissioners teetered on the brink of revealing confidences that have been kept hidden behind closed portals for the past few days.
Bennett Assailed
Among them was a charge by Hartmann that Bennett has done nothing to carry out the commission’s instructions to contact bond-holders and attempt to obtain reductions in interest rates on city bonds.
Bennett denied this angrily and asked:
“How do you think I got the interest down? (On tax revenue notes) By sitting back and laughing?”
Bennett argued that the city’s budget must be passed by the commission by March 9 and that any further delay past yesterday would jeopardize the city’s standing and bring about a state of “chaos.”
Bennett also denied he has ever favored employment of a financial adviser, though he told a gathering of commissioners, freeholders, bond dealers and attorneys Monday that he thought the city’s differences could best be settled by an adviser.
He declined to follow the suggestion of L. Arnold Frye, of Hawkins, Delafield and Longfellow, counsel for the city on bond matters.
Frye Asks Peace
Frye urged the commissioners to settle their differences and agree upon a plan among themselves.
Hartmann also brought out an intimation that “the city was to be divided up by the bondholders,” and this brought another hot denial from Bennett.
Commissioner Mary W. Kobus revealed that in considering applications for fiscal adviser, the commission also has considered having the man with the plan do the actual work of placing the bonds, a function that normally would fall under Bennett’s jurisdiction.
Bennett insisted his department is capable of handling the financial affairs of the city and would have them composed by now if it had been allowed a free rein.
Another surprise resulted when Thomas J. Fox, who said he is “a small taxpayer” and lives at 608 Royden Street, urged the commission to hold up all refunding for ten days and promised it could be settled then on a plan he is working out.
Fox said he is retired and told reporters he and two other men are working out a refunding plan for the city that will prevent a tax increase and will enable the city to pay all interest. He added:
“I’m the most important one.” The entire debate resulted from a motion to adjourn, made by Brunner. Everything that preceded this motion had been passed unanimously.
Applicants who appeared Tuesday to ask for the city adviser’s post were Melbourne F. Middleton, former commissioner; Leon C. Guest, Camden investment securities broker; Thomas R. Lill, New York technical adviser of governmental administration and finance, and J. P. Ramsey, who represented Norman S. Tabor, New York specialist in municipal finances.
Dr. Frank Parker, University of Pennsylvania finance professor and nationally known as an economist, and Thomas Christensen, former Atlantic county accountant, were unable to appear.
Tabor, now doing similar work in Cleveland and Akron, Ohio, would be unable to appear personally before Monday, the commission was advised by Ramsey, but the latter’s bid was confirmed by his superior over long-distance telephone.
Lill, who has had a wide, international experience in technical finance work, is now adviser to the Atlantic City bondholders’ committee.
The four applicants on Tuesday briefly sketched a review of their past activities in similar work, told of their plans for Camden, and the compensation they would require for the work.
Guest, the first to be heard, described himself as a Camden native who has handled many Camden bonds in the past.
Middleton, who followed, said his plan for Camden was substantially the same as the program he submitted October 2, 1935, when he applied for the position of financial adviser. The city’s first director of revenue and finance under commission form of government, Middleton is now engaged in the bond business in Philadelphia.
Ramsey described the Tabor company as the only one of its kind in the United States. It has refinanced more than 100 cities, 40 in New Jersey, and works with 164 bond dealers. Ramsey submitted a long list of bank and insurance company executives as references.
Lill said he began his finance career in 1911. In 1918 he was director of the Mexican Refinancing Commission, representing President Carranza in international negotiations until Carranza’s assassination.
After that, Lill served the Republic of Colombia as technical adviser for five years; Chile for two, Yucatan for two, and has worked in cities all over the United States and in Canada. He was chosen by the Atlantic City bond-holders’ committee 2½ years ago, still serving as technical adviser for that group, he said.
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