Real  Estate   Record





AND BUILDERS^ GUIDE.





Vol. XXI.





NEW YOEK, SATUEDAY, MARCH 9, 1878.





No.  521.





I

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l£





Publi.<;hed IFeeUy by

Che Ecii( (IBsiiitc Jlecartr ^.ssocmtton.

TERMS.
«XK YRiVK, in advance....SIO.OO.
Coinmunications should be addressed to

G.  W.  SAVEET,

Nos. :1J5 AND *1~ Broadway.





CITY TAXES, WHO SHOULD PAY THEM?

Judging from precedent efforts, the subject of
t'l.Ktition can Jje properly discussed ouly in frotn
oii;» hmidred to five hundred pages of octavo size.
We may be pardoned, however, iu nialdug ai-asli
a-id fool hardj-attempt to condense the subject
within a few paragraphs. We have previously
imderttiken to show tho sout-ces from whieh the
ta.-^ levy of last j-ear was derived.

Tlte mcagrencss of the iuformtition vouchsafed
through public documents, compels us to exercise
oiir inventive faculty iu attempting to expound
t!ic item of personal taxation. In our previous
tiuilorlaking we think we have furnished a fair
aiitilysis of the toiiic. At all events, our expo¬
sition remains unchallenged to this daj-, aud after
careful and critical study of the subject, it seems
the only warrantiible aud patent one that we can
suggest. We will reproduce it here for the sake
iif clearness and as apposite to our present tlietnc.
TAX LEVY 1877.





Taxed
Valuation.

iVi-sonal Estate.....   Sl5i,500,UOO

0,gauixed Capital—

Banks.   3r;^.0i;o.0i'K)

Ins. Co's. 1-1.500,01)0—    87,500,000
I'eid I':.<itate—

-Moris.     100,000,000

Land &

liiipr's   !H)0,000,000—1,000,000,000

51,100,000,000





Rate

of Tax.

2.05





Amount

of Taxes.

S*1!,^250





•2.05        -..',318,750





•2.07,       20,J500,000
8-29,150,000

It is proper to remark, that, hi practice, the col¬
lection of taxes ou personal property entirely tails
in re.siiect to five or ten per cent, of the amount;
tliat is, there are annually returned as uncollect-
iiile the taxes ou an a.ssessed valuation of from
ten to twenty millions of dollars; and these taxes
have to be provided for as deficiencies in the next
huilget. Therefore, to make our table accord
with the facts of the ca.se, we will regard as un¬
collectible six and a quarter per cent.—a fair av¬
erage—on the total a.sse.ssment of personal prop¬
erty. In so doing, we may entirely obliterate the
amount assigned in the table to pei-sonal estate,
thus developing a condition which must be ap¬
proximately true, that organized capital and real
estate sustain the entire burden of taxation in the
city.

It can hardly be said that this result was con¬
templated by tho present tax law, because its
language is full and explicit. After saying that,
"alllandsand personal estate, within this State,
whether owned bj- individuals or by corporations
shall be liable to taxation, subject to the exemp¬
tions afterwards specified," the law then goes on
to say that, "real estate shall be valued at such
sums as under ordinaryicircumstances it will sell
for, and also, that the terms 'personal estate' and
'pei-sonal property,' whenever they occur shall be
onsidered to  include all   household, furniture,





moneys, goods, chattels, debts due from solvent
debtoi-s, whether on account, contract, note, bond,
or mortgage, public stocks, or stocks in moneyed
corporations. They shall also'be considered to in¬
clude such portion of the capital of incorportited
companies liable to taxation on their capital as
shall not be invested in real estate."

The present status of the tax levy must have
resulted either from the apathy and indifference
of the officei-s administrating it, or ^f rom h\ck of
sj-mpathyon their part with the law and of de¬
termination to strictly enforce it. The .shibboleth
has been raised of the impolicy of taxing personal
estate; aud, as if in subservience to this idea, the
official a-ssessments upon this species of property
have been allowed to dwindle almost to an inap¬
preciable amount. Organized capital, real estate,
aud i-eal estate mortgages, being the most accessi¬
ble species of property in existence, have been
seized upon as the principal .subjects of tax a.s-
sessment, and appropriated as best suited for the
application of an unjust, theoretical aud extra
legal method of taxation.

At tlie present day we are brought face to faco
with certain obvious conditions w-hich it behooves
projjcrty owners and the public at large seriously
to consider. It is no figure of speech, and cer¬
tainly no unwarrantable use of language, toa.ssert
that the present tax levy is made principalh*. if
not exclusively, upon these three ckisses of prop¬
erty, to wit: organi-/.ed capital, real estate, aud
real estate mortgages, and that, directly and indi¬
rectly, real estate is called upon to bear more
than ten-elevenths of the whole burden.

On-the other hand, the values of "even the best
real estate in the citj- have declined from twcntj--
five to thirty percent.; le.ssdesirablegrades,.from
forty to fifty per cent., and the greater part of
the vacant land of the city from sixty to seventy
per cent. This unparalleled depreciation htts fol¬
lowed in the wake of declining rents, and the de¬
cline in rents has merely illusti-ated tuid be-on re¬
sponsive to the growing impoverishment of the
people at large.

The proportion of rental income paid over by
land owners to the city in the [shape of taxes, is
larger than was ever before known or tolerated
in the history of the city. The commonest expe¬
rience is that taxation now absorbs from tw-enty-
five to thirty per cent, ofjj-ental income, and
there are ivell authenticated cases where land¬
lords have beeu obliged to pay fully fifty per
cent, of their income to satisfy the demands of
the city. Doubtless, the enthusiastic advocates of
the exemption of personal property from taxa¬
tion regard this situation with undisguised pleas¬
ure, and as affording the maximum of benefit
that can po-ssibly be attained under any system of
tax laws.

At first glance superficial and untutored ob¬
servers might be led to indulge the .same reflec¬
tion, to wit: that this condition of taxation is
favorable to the community at large, inasmuch as
this great oppression falls principally upon land
owners and great corporations, those who are
supposed to be best able to bear the misfortune.

We have no idea of appealing to any seu.se of
justice and equity, because in matters of taxation
these senses are proverbially callous and passive
and even where there is a profession of their ex¬
ercise, we find so many advei-se theories, palpable





.sophistries and pei-sonal hobbies intervening, as
to effectually neutralize the play of the more
spiritual fticiilties.

Unless a system can be demonstrated to be good
or b:ul for tho entire coinmunitj-, it is hardlj-
worth while to .seek to arou.se or enlist public
sentiment. The advocates and defenders of the
present system and the propouiiders of other sys¬
tems, w-hich aim tit the same result that has been
brought about under the existing one, have tried
to abate and divert public interest in this ques¬
tion, and to silence public criticism bj- setting
forth the dogma of the self diffusion of taxation,
which, in tho present case, amounts to saying that
although ten-elevenths of ta.nation is drawn from
real estate, .still, by tho operation of ti natural law
(astliey are plea.sedtoterui it!, this va.st volume
of taxiition retUly dilfu.sos itselL like the atmo.s-
phere, throughout the w-hole immicipal bodj-.

AVe shall choose our own t ime to discuss the value
of these various theories and to study their proba¬
ble elfects. At present, w-ith a view- of enlisting the
titteution of our readers in ivhat we believe to be
a more eiiuitable system of taxation, we will nn-
dertakc to foreshadow w-hat appeai^s to be the in¬
evitable resultof a continuance of the unfortunate
condition which has been evolved out of the pi-es-
ent system.

For nearh- five w-eary years we have -ivaited for
the rekindling of public interest in real estate, and
the appearance of the moderate capitalist and in¬
vestor to deposit his surplus capital in real estate.
The most that we can claim in the w.ay of such
expressions, is, that certain well-to-do citizens
have mado purchases of fashionable residences
at prices which thej' were contentetl to pay.

Tbe utter aKscnce of anj- pronounced and gen¬
eral investment demand can be attributed mainly
to one cause—the burden of taxation. No s^me
man is likely to invest his ctxpittil even in produc¬
tive property where the owner.ship involves really
a joint title with the citj-, the latter demanding
in some cases one-half the rental as its rightful
share of the income : and least of all will the ctip-
italist invest his money in vacant and unproduc¬
tive lands alre.adj- a.s.sessed for ta.xes at valuations
more than their purchase prices and liable to the
infliction of other city claims for street improve-
ment-5.

Real estate iu this citj- has gone through a pro¬
cess which h.is w-iped out many small and some
lai-ge equities of redemption. Property is gradu¬
ally being concentrated by forclosures in the
hands of wealthy people and corporations. After
the last foreclosure that is likely to occur during
the present revulsion has taken place, another
ordeal aw-aits the owner of real estate in which, be
ho wealthy, or only well-to-do, he will be com¬
pelled to choose between p.iying the arrearages
of taxes and assessments and capitalizing them
in the cost of his jiroperty, or relinquishing the
property to the citj- as having too little value,
present or prospective, to indemnify hun for the
paj-ment of excessive liens.

After the last weak holder has been shaken out,
and after the stronger ones have elected to so re¬
linquish their property to the citj-, it is easy to see
that the bodj- of our real estate may be concen¬
trated in comparatively few hands ; that, insitead
of representing twentj--five thousand owners, as
is .supposed to be the case, there may then be not