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 '°''' ' A53 TWELVE LETTERS ^^' 
 
 ON 
 
 THE FUTURE 
 
 New York 
 
 BY 
 
 GEO. H. ANDREAA^S 
 
 NEW YORK: 
 
 MARTIN B. BROWN, PRINTER AND STATIONER, 
 
 (,J- 20I, 203 & 2bs William Street. 'tt'X 
 
 mm ^'^^' S^-Sf 
 
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TWELVE LETTERS 
 
 ON 
 
 THE FUTURE 
 
 OF 
 
 New York, 
 
 BY 
 
 GEO. H. ANDREWS 
 
 NEW YORK: 
 
 MARTIN B. BROWN, PRINTER AND STATIONER, 
 
 Nos. 201, 203 & 205 William Street. 
 
 1877. 
 
«N EXCHANOS 
 
 VVis. Hist.Soo, 
 
 20 i '05 
 
in 
 
 o 
 
 ^ THE FUTURE OF NEW YORK, 
 
 (f> 
 
 LETTEK I. 
 
 HOW NEW Tt)KK ACQUIRED SUPREMACY STEAM AS A LEVELER. 
 
 To the Editor of the New York Times : 
 
 In complying with your request to present my views as to 
 the outlook of affairs, I beg to say that I am not animated by 
 any rash desire to rush in where wiser men would fear to 
 tread. The situation is one full of difficulties, before which 
 bold men quail. It is a time for plain talk, calm thought, and 
 decisive action. 
 
 It is a sweet use of adversity when it is accepted as a 
 schoolmaster teaching lessons of wisdom. For nearly four 
 years New York has lain in the very ashes of adversity. Ev- 
 ery trade, every calling, every man has felt its chilling touch. 
 And now on all sides is heard the inquiry, is the daylight at 
 hand^is there hope in the future? This trial of adversity has 
 not been limited to the area of our own city, State, or land. 
 With more or less intensity it has extended as far as civiliza- 
 tion extends. I do not propose to discuss in any general way 
 its causes or its cure, but to deduce some practical lessons for 
 the admonition of the people of this city, and to make some 
 practical suggestions which may inspire the despondent with 
 hope, that they may endure the present with fortitude and be 
 animated to new achievements and new successes. 
 
 It is to be accepted as a truth that New York is no longer 
 endowed by natural advantages ^vith the commercial supremacy 
 which crowned her by di\ane right as the empress of trade 
 upon this continent. Her proximity to the ocean, always and 
 easily accessible by sailing-vessels ; her facility for reaching the 
 interior by the Hudson River, and the exclusive possession by 
 the State of a depression in the Alleghany range, which af- 
 
forded easy egress to the West, were natural advantages sucli 
 as no other city upon the Atlantic coast enjoyed. The Erie 
 Canal emphasized and supplemented these natural advantages, 
 and gave the commerce of the city an impulse which sent the 
 population from 123,000, in 1820,' to 202,000 in 1830. 
 
 For long years after this the merchants and traders of Xew 
 York had no other care than to gather the harvest which each 
 returning season brought to their coffers ; to take toll of the 
 products of foreign nations and the great West, which found 
 ingress and egress by her gates. While huge wagons, drawn by 
 six or eight horses, were painfully climbing the heights of the 
 Alleghanies with three or four tous of freight to or from Phila- 
 delphia or Baltimore, a canal-boat, drawn by a single horse, con- 
 veyed to New York 10 or 20 times the weight and bulk borne 
 by the wagon. This city had no competitor, and feared 
 none, and complacency was the prevailing mood of her merchants. 
 
 This complacency was first shocked by the solid and far- 
 seeing men of Boston, who determined at any cost to secure a 
 portion of the Western trade, and the railroad from Boston to 
 Albany was the outcome of that determination. The Cunard 
 line of steamers, with Boston as the American terminus, was 
 also a thorn in the flesh of this complacency, which compelled 
 the recognition of the then appalling fact that there could be 
 such a thing as competition ; and under the influence of this 
 spur the Hudson River Railroad was constructed, and jSTew 
 York was again supreme — at least for a time. But the old 
 mood of complacency was never again so fully indulged, 
 although to this day it prevails in a degree which has wrought 
 some e^als and threatens others. 
 
 During these halcyon days, while merchants were exclusively 
 engaged in gathering gains, the government of the city was 
 given over almost wholly to politicians. The former were so 
 well content with their gains that they rarely complained, even 
 when the latter appropriated an immoderate share of those 
 gains. 
 
 Other cities, less alert than Boston, at last concluded to 
 follow her example and attempt to secure a share of the 
 
Western trade. Steam was the agent to equalize the advan- 
 tages of contending and competing cities. The proximity of 
 New York to the ocean was, as an advantage, neutralized when 
 steamships vexed the Delaware and the Chesapeake. Tlie 
 more difficult grade of the Alleghanies at the approaches to 
 Philadelphia and Baltimore was to a large extent a question 
 of fuel, and that was cheaper upon the lines of the roads 
 encountering the heavier grades than upon the lines in this 
 State, and so it has come to pass that the supreme advantages 
 which 'New York long enjoyed by a divine right or gift of 
 nature, and in later years by artificial water-ways connecting 
 the Hudson with the lakes, have ceased. Supremacy has 
 yielded to equality, steam being the leveler. 
 
 That which costs most is prized most. The advantages which 
 New York enjoyed cost nothing. They were nature's endow- 
 ment. The Erie Canal cannot be said to have cost the State 
 anything, so ample were its revenues for more than a 
 generation. Philadelphia and Baltimore, on the contrary, have 
 bought their equality at a great price, and that equality 
 they mean to maintain, and, if possible, acquire a degree of 
 supremacy. In those cities there is no sentiment of compla- 
 cency, it is all competition, rivalry, expectancy. This feeling 
 pervades all classes, from the merchant to the laborer. They 
 strip themselves of every impediment as for a race - a race in 
 which they have gained great advantage, and in which they 
 hope and mean to win. 
 
 While it is true that these cities have greatly gained, it is 
 also true that New York has not greatly lost. A vessel does 
 not cease to move when the propelling force has ceased to act. 
 An insolvent house of long standing enjoys credit after the 
 line of solvency has been passed. A great city will maintain 
 its trade by the mere force of momentum, long after adverse 
 influences, hostile to its prosperity and destined to work its 
 ruin, become active. But the momentum resulting from the 
 spent energy of forces is a feeble dependence, and must be 
 supported by new agencies, or the end must come. This does 
 not yet truthfully portray the condition of New York. It is 
 
not so bad as that. Still a city of great resources, and of vast 
 possibilities, lier energies are at present hampered, and her 
 future darkened by circumstances yet controllable. Samson is 
 not wholly shorn, or quite blind. 
 
 In other letters I hope to point out some of those circum- 
 stances, and perhaps suggest some methods of controlling 
 them. 
 
 LETTEK II. 
 
 CHANGES IN LINES OF TRADE— NECESSITY EOE ADAPTATION TO 
 CHANGE — VALUE TO THE COMMUNITY OF A MIDDLE CLASS. 
 
 The great Northwest is, in a certain sense, the offspring of 
 the State of New York. The means of communication de- 
 vised by the genius of Clinton, and made effective by the 
 munificence of this State, peopled some of the States whose 
 stars adorn our flag, which have, in turn, become the mothers 
 of States. As parents sometimes see their children rise about 
 them more stalwart and comely than themselves, so some of 
 these newer States have within their borders cities which have 
 attracted a portion of the business which was formerly a 
 feature of the trade of this city. Thirty years ago merchants 
 and traders from every section of the country came to New 
 York to purchase their goods. Here credits were easier, stocks 
 larger, and prices lower than elsewhere ; and the " jobber," as 
 he is called— that is, the dealer who stands between the im- 
 porter and commission merchant, and the retailer — needed a 
 spacious, and attractive store, carried a large and varied stock 
 of goods, and employed a multitude of assistants to conduct 
 his business. The purchaser came a long distance, at a large 
 expense, and bought a year's supply. The winter w^as a close 
 season, for then navigation was sealed. To-day, New York is 
 no longer the centre of the jobbing trade. It is, to be sure, 
 the centre of a jobbing trade, but that is a home, or near-by 
 trade. Cleveland, Chicago, Cincinnati, St. Louis, and many 
 minor cities, are now each jobbing centres, dealing directly with 
 the retailers within their respective spheres. In some of these 
 
cities, too, are found importers, and commission-houses estab- 
 lished by Eastern manufacturers. 
 
 " Times change, and men change with them," and if the 
 men don't change, so much the worse for them — they will be 
 left behind in the keen competition of life, and drift, wrecks 
 upon the strand. So, doubtless, thought the controlling mind 
 in the house of A. T. Stewart & Co. when it decided to estab- 
 lish a branch in Chicago. Choice did not dictate this, con- 
 venience did not, but necessity did, and the men changed their 
 policy with the times, in verification of the adage. Here, 
 again, supremacy gives way to equality, and New York is 
 checked in her growth in the line indicated. 
 
 As in morals, one who hesitates is lost, so in business the 
 city which hesitates, falters, and is dismayed, is in peril. He 
 is the successful man who in the course of a large experience 
 has versatility enough to adapt himself to new circumstances 
 and new relations. See the great Astor, ready for any emer- 
 gency, dismayed by no disaster, surrendering to no defeat. 
 Full of latent reserved power, he seemed to court difficulties 
 to triumph over them. So, too, witli Yanderbilt ; as skipper 
 of a periagua he was daring and successful. When sucli craft 
 were superseded by steamboats, he adapted liimself to the new 
 conditions, and excelled ; when the steamboat surrendered to 
 the railway, he did not surrender, but seized the railway, con- 
 trolled it to his uses, and again excelled. Communities cannot 
 adapt themselves to changed conditions with the alertness of 
 individuals, for a ship cannot turn in so small a circle as a 
 yawl. 
 
 Kow, there are communities and communities. The com- 
 munity of New York is essentially different from the com- 
 munities of Boston, Philadelphia, and Baltimore, and the 
 comparison is not favorable to New York. The local senti- 
 ment, not easy to define, but always alert, potential, and de- 
 fiant, which prevails in the cities named, is lacking here. This 
 sentiment, in its last analysis, is profoundly selfish, not as to 
 the individual so much as to the community, but it is also pro- 
 digiously effective. The commercial creed of the Baltimorean 
 
begins with : " I believe in the Baltimore and Ohio Railroad," 
 and with that it ends. The Philadelphian, in like manner, be- 
 lieves in the Pennsylvania Hailroad. And these creeds include 
 the infallibility, impeccability, and invincibility of the respect- 
 ive roads. It must be admitted that this devotion is reciprocal, 
 and these roads are loyal to the interests of the communities 
 they serve. The New-Yorker believes in nothing but that 
 New York is a great city, with great natm-al advantages, which 
 will in some mysterious way work out for his city a great des- 
 tiny. He ignores forces working silently against his city. He 
 disdains to note symptoms — not of decay exactly — but say of 
 arrested development. He has not discovered that natural ad- 
 vantages have been neutralized by the equalizing agency of 
 artificial advantages, as described in a former letter. 
 
 The absence of this pervading sentiment of local pride, 
 which unifies a community, is chiefly owing to the fact that 
 there is in New York no middle class to serve as a connecting 
 link between the rich and the poor ; a class solid, substantial , 
 and intelligent ; anchored to their homesteads ; diligent in their 
 business, and keenly sensitive to the interests of the city they 
 inhabit, respected by the rich, and confided in by the poor. 
 Such a class is an enormous force in a community ; conserva- 
 tive in all that pertains to law and order; watchful over every 
 interest of their city, and aggressive in everything that will 
 promote the welfare of their municipality. This class may be 
 somewhat sordid, if you please ; but even this makes them an 
 effective class ; for, as a great British statesman has said : " The 
 love of lucre, though sometimes carried to a ridiculous — some- 
 times to a vicious — excess, is the grand cause of prosperity to 
 all States." I do not mean to say that there are no individuals 
 of this class here, for there are many, but not a sufficient num- 
 ber, compared with the entire population, to constitute a class 
 exercising a powerful or controlling influence in affairs. 
 
 That New York has grown until recently more rapidly than 
 competing cities, is another fact that accounts for the lack of a 
 sentiment of local pride and supreme devotion to local inter- 
 ests. This rapid increase has been chiefly due to immigration. 
 
9 
 
 not alone from foreign countries, but from other States of this 
 country. Wliitlier the middle class have gone, and why they 
 went, and why those who come hither from other States do 
 not take root here as they should, may he hereafter considered. 
 It is gratifying to know that there has, within a year or 
 two, been developed something of this sentiment of local 
 pride and devotion to local interests. It comes none too soon, 
 and it is to be hoped that it will increase in intensity and 
 volume. Its spring is self-interest — always an effective motor — 
 and its results, if it shall possess the gift of continuance, and be 
 wisely applied, will promote the general welfare by giving the 
 business interests of our city a new impulse ; so that, instead of 
 weakly surrendering the crown of connnercial supremacy to 
 any rival, it shall be proved that " he that wrestles with us 
 strengthens our nerves, and sharpens our skill." 
 
 LETTEE III. 
 
 TMPOKTANCE OF THE GRAIN TRADE NEED OF TERMINAL FACILI- 
 TIES RAPID TRANSIT — INFLUENCE OF ELEVATORS LABOR 
 
 STRIKES THE BROOKLYN BRIDGE. 
 
 The transportation to the seaboard of the products of the 
 West is the immediate and ostensible prize for which rival 
 cities are contending. It is believed that the city which secures 
 this, or much, or most of it, will have various other things of 
 vast commercial value added to it. The port must be fre- 
 quented by vessels to convey these products abroad, capital 
 must be lodged for purchases and expenses, supplies and re- 
 pairs to shipping must be provided, labor to handle must be 
 employed, towage and pilotage must be paid. To some extent 
 imports will pursue the line of exports, and furnish new ele- 
 ments and sources of traffic and gain. Indeed, one New York 
 house, extensively engaged in importing, is arranging to re- 
 ceive a portion of its merchandize through a branch in Balti- 
 more, and another is receiving a large portion of its foreign 
 goods througli lM)ston. Cargoes of coffee, when destined for 
 
10 
 
 the West, are landed at Baltimore almost exclusively. That 
 port which can receive, deliver, and handle exports most ra- 
 pidly and most cheaply will retain or obtain this prize. It is a 
 question of dollars — no, not of dollars, but of cents and mills. 
 Upon such small issues — small in detail — hangs the question 
 of ultimate commercial prosperity, possibly commercial su- 
 premacy. 
 
 And here New York is at a disadvantage. The cargo and 
 the ship must be brought together with the least possible delay 
 and at the least possible cost. At present the cost of handling 
 the products here is greater than elsewhere, and this city loses 
 a portion of lier trade. Some of our dealers have followed the 
 trade to another city, while the others are waiting for a prac- 
 tical solution of the problem as to cargo and ship. There is 
 need of wise counsel and early action. There is a leak, and it 
 must be stopped. Bankers tell me that they find the current 
 of certain lines of Western financial accounts changing ; they 
 go West to find the cause, and are told the business is transferred 
 to another city because of terminal expenses and delays here. 
 So closely are business interests interlocked that no link in the 
 chain can be jarred without a responsive shock to the whole. 
 This blending of everj^ interest in the common welfare renders 
 it in the last degree imwise for any to assume that it is too 
 remote to be injured by im})eding effective measures for assur- 
 ing facilities for transhipment of produce. 
 
 The subject of rapid transit within the city limits is one 
 which cannot be passed by. It is hoped that the time is at 
 hand when it will possess the qualities of a commanding inter- 
 est. In 1866, as Chairman of a special commission to investi- 
 gate the subject, I devoted several months to a careful examin- 
 ation, and the conclusion then arrived at — that underground 
 railways passing under streets would best provide for the wants 
 of the city in resj^ect to the safe, rapid, and cheap transportation 
 of persons and property — seems a sound one. The Fourth 
 avenue subway has been a very long step in the direction 
 indicated. 
 
 Elevated roads have their advocates, and undoubtedly their 
 
11 
 
 merits. Rapid transit roads need a population upon or near 
 their lines. It is alleged with much force that the road must 
 precede the inhabitants ; that it must be built, in fact, to make 
 remote property habitable. On the other hand, it is urged 
 with ecjual force that such a road cannot be constructed without 
 injury to valuable property in the improved portion of the city, 
 and that the damage to improved property is immediate and 
 absolute, while the advantage to distant property is remote and 
 contingent. 
 
 Curiously enough, wdiile this controvers}^ is pending, a 
 method of rapid transit has come into vogue which is of inter- 
 est in this connection. Perpendicular rapid transit has an 
 important bearing upon horizontal rapid transit. If the man 
 who makes two blades of grass grow^ upon a spot of ground 
 where only one grew before is a benefactor of his race, what 
 shall be said of the man who, in effect, makes two houses stand 
 where only one stood before ? The elevator is the vehicle which 
 effects this result. Until within two or three years the third story 
 was as near the sky as it was possible to induce the better class 
 of tenants to go, but the steam elevator makes the fifth and even 
 the sixth accessible and habitable, and the difference in rents 
 between the several floors, where this vehicle is in use, is sur- 
 prisingly small. It has become possible, then, to accommodate 
 within a given area a population much more dense than could be 
 housed without this agency. Should the erection of lofty 
 dwellings, flats as they are called, continue to meet with favorj 
 the occupation of unimproved lots must proceed at a slower 
 rate, and the improvement of those more remotely situated be 
 in some degree retarded. The influence of the steam elevator 
 upon down-town property admits of no question. Certain call- 
 ings w^hich are especially gregarious And it possible to keep 
 within the coveted area by occupying the now accessible lofty 
 stories. Indeed, the upper stories of ordinary buildings down- 
 town, without elevators, are not easily rented. 
 
 That rapid transit in some effective form will come is certain. 
 It will be indispensable for a full development of the territorial 
 resources of the city. The conformation of Manhattan Island 
 
12 
 
 in itself will impose the necessity of providing means of speedy 
 transit. Yet it is possible, if New York shall persist with Bour- 
 bon-like obstinacy in certain methods, and resist certain reforms, 
 that the urgent necessity for rapid transit may be postponed. 
 
 Incidentally it may be remarked that labor-strikes have 
 worked an injury to the city. While ship-building was yet 
 a profitable calling it was driven from the city by strikes. 
 These, however, are not peculiar to New York, but here their 
 frequency and intensity are augmented by the facilities for 
 organization afforded by the density of the population. In the 
 contest between labor and capital, strikes will continue to occur. 
 They are incident to the law of supply and demand growing 
 out of a high state of civilization. They are the result of fric- 
 tion in the social machinery, for which those civil engineers of 
 society, known as political economists, have not as yet been 
 able to propose an adequate remedy. They must be referred 
 to the good sense and forbearance of those immediately con- 
 cerned. 
 
 The Brooklyn Bridge is a magnificent conception, and of 
 the highest possible importance — to Brooklyn. It is an enter- 
 prise to which New York is committed beyond recall, so that 
 its expediency, from a New York point of view, is quite beyond 
 the pale of discussion. Wlien, in the future. New York shall 
 have demonstrated an ability to govern herself wisely and well, 
 the question of the union of the two cities may become a prac- 
 tical one ; until then the bridge will be one of sighs to the 
 New York tax-payer. It was a singular auomaly to see, recently, 
 an annoimcement of the issuing of bonds to build the bridge to 
 Brooklyn, and an announcement that a bridge connecting one 
 part of New York with another was closed because of its 
 insecure condition. The very fact, however, that this city is 
 pledged to this vast undertaking should add urgency to the 
 efforts to reinforce the resources of the city, by removing every 
 hindrance to the fullest development of her powers. 
 
13 
 
 LETTER IV. 
 
 DEBT THE CAUSE OF HIGH TAXATION NECESSITY FOK REDUCING 
 
 EXPENSES REAL ESTATE AND RENTS, 
 
 Debt and taxation are a load nnder which New York is 
 staggering. Debt, State and municipal, is placed before taxa- 
 tion because debt is in great part the cause of the excessive 
 rate of taxation which is now the source of complaint, and is 
 regarded as withering the energies and checking the growth of 
 the city. The actual increase in the current expenses of the 
 city in proportion to the value of the property is really not 
 very great, as compared with a period twenty years ago. For 
 instance, in 1857 the rate of taxation for current expenses was 
 $1.13 upon $100, and in 1876 the rate for the same purposes 
 was $1.30 upon $100. This statement will be regarded by 
 many as incredible, so a few figures by way of proof. The 
 rate for 1857, for all pui-poses, was $1,556-1. From this deduct 
 the interest upon the debt, $1,311,813, and the State tax of 
 If mills upon the assessed value, $895,515, and it gives a rate 
 of $1.13. In 1876 the rate for all purposes was $2.80. From 
 this deduct the interest upon the debt, $9,503,189, and the 
 State tax, $7,233,189, and it gives a rate of $1.30. 
 
 Now, do not let me be considered as in anywise the apologist 
 for the current extravagance. The city debt is immense, and 
 it is tlie product of extravagance, recklessness, and dishonesty. 
 But, there it is, and it has to be met honestly and carried man- 
 fully- The State tax has been enormous, and this city has 
 paid in the past 10 years $64,014,204 in that direction. For- 
 tunately, it is now subsiding, and the city will pay f(jr that 
 charge in 1877 less than in any year since 1867. The building 
 mania, which has cost the State so largely during the past few 
 years, no longer prevails, and it is hoped that the good sense of 
 the Legislature will permit no large appropriations this year. 
 The interest upon the city debt must be paid, and for the 
 present, at the fixed rate of interest. It is possible, however, 
 under certain conditions, to be hereafter named, that the rate 
 of interest may be reduced, and so that burden lightened. 
 
14 
 
 Tliere reiiiaiii, then, only the current expenses of the city 
 in which immediate, or very early retrenchment, is possible. 
 Then in that dii-ection mnst the knife of retrenchment be 
 applied. Can it be done 'i It can. It will hurt ; but so does 
 the surgeon's knife. The body politic is in peril, in extremity, 
 and the fact must be recognized. Resolution and courage are 
 needed to apply this remedy, but they ought not to be wanting. 
 
 The Board of Estimate and Apportionment is the final 
 arbiter in fixing so much of city expenses as is under local 
 control. Legislative restrictions, so far as they relate to the 
 minimum compensation for services, should be removed, still 
 restricting the maximum. The composition of the Board of 
 Apportionment should be chaiiged. The Mayor and President 
 of the Board of Aldermen should remain, but the head of one 
 department should not be called upon to fix the appropriation 
 for other departments. It is an invidious duty. The gentle- 
 men who fill those positions now well know that this suggestion 
 is not made from any distrust of their ability or integrity. 
 They would, I doubt not, esteem it a privilege to be released. 
 The Board should consist of five, three of whom might be 
 selected respectively by the resident members of one year's 
 standing, of the Chamber of Commerce, tlie Bar Association 
 and the Produce Exchange, and commissioned by the Mayor, 
 from amongst citizens who for two years preceding have been 
 the owners of real estate of the assessed value of at least 
 $25,000. These gentlemen should be ineligible for any local 
 office to which a fee or salary is affixed for two years after 
 their terms as members of this Board have exj)ired, and should 
 be prohibited from recommending or procuring the appoint- 
 ment of any person to a local office during their term of office. 
 The term of one of them should expire each year. A 
 Board so composed would give to the real estate interest the 
 importance and control to which it is so well entitled. 
 
 The fact that this city could, as already stated, pay for a 
 State tax in ten years the enormous sum of more than 
 $60,000,000 from taxation — equal to more than half the city 
 debt — is a proof of the wonderful vitality of the city; a 
 
15 
 
 vitality, however, wliicli must not be too much strained or pre- 
 sumed upon, or a collapse may ensue. A large portion of this 
 State tax was to meet the bounty debt, and probal)ly none of 
 that vast sum was for any pm-pose which increased the taxable 
 resources of the city. 
 
 In the general depression which, for nearly four years, haa 
 affected every interest in the country, )-eal estate has not 
 escaped. Yet other investments have proved less reliable than 
 those in real estate. The owner of unincumbered real prop- 
 erty in this city may have reason to complain of a diminished 
 income from reduced rents, and of high taxes, but still hi& 
 condition is far better than that of those who hold securities 
 which have defaulted in the payment of interest, or stocks no 
 longer paying dividends, the capital of which has, in some 
 cases, disappeared. The diminished compensation paid to 
 those employed, and the enforced idleness of many out of em- 
 ployment, has led to a condensation of tenants in the one case, 
 and a total stoppage of rents, very often, in the other. That 
 is to say, families who formerly occupied an entire house have 
 been compelled to put themselves into half a house, and others, 
 formerly occupying half a house, have been reduced to the ne- 
 cessity of occupying apartments, or a single floor. This process 
 of condensation has left a good deal of property unoccupied. 
 There probably have not been so many instances of removal 
 to distant suburbs as in better times, as such removal is rarely 
 a merely economic measure, so far as family expenses of living 
 are concerned. 
 
 Owing to the changes of methods in business already re- 
 ferred to in part, and a resulting surplus of store property, 
 some stores remain idle, and the rents of nearly all, where 
 leases have expired, have suffered reduction. Incited by the 
 prevailing low prices for materials and labor, a good deal of 
 building has been going on in the face of the depression in 
 business, the owners not expecting to find occupants imme- 
 diately, but deeming the temporary loss of interest upon the 
 investment a less consideration than the advantage obtained in 
 the very low cost of construction. 
 
16 
 
 LETTER Y. 
 
 SPECULATION IN REAL PROPERTY THE CITY A SHARER RUINOUS 
 
 ASSESSMENTS INCREASING TAXES. 
 
 That many have been ruined by the decline in the value of 
 unimproved real estate is true, but the conditions were peculiar. 
 An era of speculation in property, during which prices per- 
 fectly fabulous were current, has resulted in a collapse which 
 has wrecked vast nominal fortunes. For several years property 
 in the upper part of the city advanced so rapidly in price that 
 it is hardly exaggeration to say that a man might, with his 
 eyes closed, put his finger upon a map of that part of the city 
 above Fiftieth street, purchase the property thus blindly 
 indicated, at the owner's valuation, and in a few months it 
 could be sold at a profit. It was a lottery in which eve^-y 
 ticket drew a prize. Men, many of them of the soundest 
 judgment, were carried away by the brilliancy of the bubble. 
 Not many expected to hold permanently, and few expected to 
 build. It was a passion, a contagious fever. The boldest 
 operator was the most successful one. A large part of the 
 transactions were upon margins, as they would be called in 
 speculations of another character. Some cash was paid and a 
 large mortgage given. The crisis of 1873 came ; there was a 
 pause. It became difficult to realize the cost of property. 
 Large estates were offered at auction. The staggering market 
 fell, struck down by the hammer of the auctioneer. The day 
 of reckoning came, mortgages were foreclosed, and men who 
 had acquired fortunes in other pursuits, but had staked their 
 all upon the hope, which they had deemed certainty, of 
 advancing prices, found themselves mined. No one can with- 
 hold from the sufferers by the revulsion a sentiment of 
 sympathy. 
 
 The city was, to some extent, a partner in these transac- 
 tions. Stimulated by the success of Central Park, other parks 
 were projected, and the property secured at extravagant prices. 
 Drives, and avenues, and boulevards of the most permanent 
 and costly character, were laid out and constructed. All the 
 
17 
 
 of several millions of dollars, to defray a portion of the expense 
 of some of these stupendous undertakings, and there they stand 
 to-day, monuments of coi'porate and individual extravagance, 
 almost " as idle as a painted ship upon a painted ocean." The 
 city's motto seemed to be, " millions for ornament, but not a 
 cent for utility ;" for, during this very period, the pavements in 
 taxable property of the city was put under bonds to the extent 
 the lower and business portion of the city fell into a condition 
 but little better than the streets of a Turkish village ; imped- 
 ing traffic, and imposing burdens upon trade, already over- 
 weighted in the contest with competing cities. 
 
 It is painful to make these statements ; but they are true, 
 and, as intimated in the first of these letters, it is a time for 
 plain talk. It is time to strike a balance, to take an account 
 of stock, to review the past, and address and adjust ourselves to 
 the future with what faith and hope we may. 
 
 While upon unimproved, and, of course, unproductive 
 property, taxation was onerous, assessments for improvements 
 were crushing ; and have, in districts of considerable extent, 
 not only reached, but passed, the verge of confiscation. Time 
 affords a solvent for many difficulties, and the embarrassment 
 of property thus situated must probably, for the present, be 
 remanded to aw^ait the development of methods of relief 
 through the subduing agency of time. 
 
 ^^ot the least of the evils attending the condition of things 
 herein described, is that so large an area has been either placed 
 in a condition where it is likely to be kept out of market for 
 years, or enhanced so greatly in cost as to unfit it for residences 
 of the cheaper grade, so essential for the accommodation of 
 families of moderate means, constituting that middle class 
 before referred to. This state of things has been the cause of 
 the migration, of manv thousands of those who should have 
 remained our citizens, to Long Island and New Jersey, and 
 emphasizes the demand for methods of transit which must be 
 safe and cheap, so as to reach the lower-priced lands in the 
 Twenty-third and Twenty-fourth Wards. If it were not for 
 the fact that the energies of the city are fettered by the bonds 
 2 
 
18 
 
 of a crushing debt, iminicipal aid for an effective method (jf 
 utilizing the vacant territory in the annexed district would be 
 a fair subject for consideration. But it may be questioned 
 whether the city is not in the condition of a man who, by his 
 extravagance, has incurred debts which form a lien upon his 
 estate of such gravity as, for a time at least, to hinder his 
 improving his property in a direction almost indispensable, 
 and compel him to practice a* unused and inconvenient 
 economy, to the absolute detriment of his estate. 
 
 It was not until after 1837 that the taxes of this city 
 
 regularly exceeded 50 cents on the $100. In 1846 they began 
 
 to exceed $1 on the $100, and since 1863 they have regularly 
 
 exceeded $2 on the $100. Since 1863 the state tax alone has 
 
 greatly exceeded, every year, upon each $100 of valuation, the 
 
 rate of the city tax prior to 1837. The tax-payer, in looking 
 
 over the musty records of the past, is apt to forget how meagre 
 
 were the returns he received for his taxes forty and fifty years 
 
 ago. It was the old story of " poor pay, poor preach." Then 
 
 he bought his spring water from a cart ; he had no day police, 
 
 and his night-watch was without discipline ; his streets were in 
 
 darkness when the moon was in the almanac ; his fires were 
 
 extinguished by water from cisterns or the rivers, through 
 
 large syringes upon small w^heels ; his parks were the common 
 
 lands : his schools taught the three R's ; he swept the streets 
 
 on certain days by his personal labor, and the ashes from his 
 
 wood-fires were sold to collectors. In short, he did without 
 
 many things he now has, and did many things for himself 
 
 which others now do, or at least are paid to do, for him. It is 
 
 unnecessary to detail them, but this changed condition costs — 
 
 far more than it ought to, I admit. The luxuries unknown in 
 
 former days — and we always think them better days — have 
 
 now become necessaries, and the (piestiou can never be how to 
 
 dispense with them, but how^ to enjoy them without a cost 
 
 quite disproportioned to the cost of snnilar service, not only to 
 
 private corporations and persons, but to other municipalities. 
 
 This is the problem demanding present solution ; so that this 
 
 great city, relieved from hindrances, so far as may be, in this 
 
19 
 
 direction, shall be the better fitted for the contest with aspir 
 ing rivals. 
 
 LETTER VI. 
 
 "WHO PAY THE CITY TAXES THE VALUE OF KEAL ESTATE FIXED 
 
 BY THE VALUE OF THE PERSONAL PROPERTY UPON IT. 
 
 And now, in view of some suggestions to follow, it be- 
 comes necessary to determine who pay the $30,000,000 of an- 
 nual taxes in this city. It is the owners of personal property. 
 The generally received opinion is that it is the owners of real 
 estate who pay the bulk of the city's annual tax. But let us 
 look for facts a little below the surface. A owns five dwell- 
 ings, and deems himself a considerable tax-payer. Analyze 
 this claim. He rents one to B, a physician ; the second to C, 
 who is an editor ; the third to D, who is a bank ofiicer ; the 
 fourth to E, who is a lawyer ; the fifth ^he occupies himself. 
 Now, to the rent charged to B, C, D, and E is added a sum 
 sufiicient, at least, to pay the taxes upon the dwellings occupied 
 by them respectively, and this rent, including the taxes, is the 
 product of personal property, that is, the brains of the several 
 tenants ; and yet not one of these tenants may apj)ear upon 
 the tax rolls as specifically assessed for personal pi'operty, and 
 still by the use of their specifically untaxed and untaxable per- 
 sonal property — brains — they pay all of A's taxes upon the 
 real estate he owns, and give him his living l;)esides. 
 
 Or, again, A owns five stores. He rents one to B, who has 
 it filled with imported goods ; the second to C, who occupies 
 it wath goods on commission ; the third to D, who uses it for 
 general merchandise and resides in Brooklyn ; the fourth to E, 
 who fills it with goods manufactured in another State, sent to 
 him as an agent to sell ; the fifth to F, whose goods are pur- 
 chased with money borrowed upon United States bonds. Now, 
 none of these stocks of merchandise are taxed, or taxable, 
 specifically, under the law, and yet they all do pay, in their 
 rents, the taxes assessed to A, and furnish him the means of 
 living besides. 
 
20 
 
 Yet again, A owns five tenement-houses, which are- 
 rented to laborers, mechanics, porters, seamstresses, people not 
 taxed or taxable, specifically, under the law, and yet who pay 
 by means of their personal property — brains, eyes, hands,, 
 muscles — the taxes upon the property they occupy. 
 
 Or, if you please, A owns five vacant lots, but the taxes he 
 must pay from personal property — it may be the income from 
 United States bonds, or investments in another State, property 
 not taxed or taxable, specifically, under the law, but which is 
 yet made by an inexorable higher law to pay taxes upon the 
 unimproved and unproductive real estate, and so contribute to 
 the support of the State and city governments. 
 
 Or, A may own his dwelling only, as real estate, and then 
 again he can by no possibility pay the taxes upon it unless he 
 has either investments in personal property, or follows some 
 pursuit wdiich is made productive by the aid and use of per- 
 sonal property, which will furnish the means to pay the taxes 
 upon that dwelling. 
 
 There is one warehouse in this city which pays an annual 
 tax of $30,000 to $40,000. It is used for the storage of goods, 
 nearly — perhaps quite — all of which are not taxed or taxable 
 under the law ; yet these very goods pay, in the charges upon 
 them, the whole of this enormous sum of taxation. 
 
 Now, it may be that these views are at such variance with 
 commonly received opinions that they will not at once find 
 credence. Nevertheless they are tme, and their general accept- 
 ance would be productive of good. Nothing would, perhaps, 
 go so far to promote true reform — I do not mean a mere sav- 
 ing of candle ends, but a jealous watchfulness over all sources 
 of extravagance and corruption — as to invest the entire people 
 with a sense of their dignity and power and responsibility as 
 tax-payers. When the whole population can be uiade to feel 
 how closely and utterly their interests are bound up in the 
 welfare of the city they inhabit, the outlook for the future of 
 New York will indeed be hoj)eful and bright. 
 
 To retm*n from this brief digression. It has been esti- 
 mated that the value of the personal property in this city in 
 
21 
 
 various forms is some $2,000,000,000, of which, about nine- 
 tenths, or more than $1,800,000,000 is not taxable under pres- 
 ent laws. (See Tax Commissioner's Report for 18Y5.) Yet it 
 is evident, from the statements made in this letter, that in 
 spite of constitutional and legislative exemptions, all the per- 
 sonal property in this city is taxed, although but little of it 
 specifically ; and, further, that the personal property really 
 pays all the taxes of the city. Real estate serves as the visible 
 and tangible standard of measure — the foot-rule, if you please 
 — by which the tax is adjusted and proportioned. 
 
 l^ot only does personal property pay the taxes levied as 
 against real estate, but the value of the real estate is fixed and 
 controlled by the value of the personal property upon it. Real 
 estate in New York is assessed at nearly $900,000,000, while 
 the real estate in Hamilton County is assessed only about 
 $660,000. Hamilton County is about 40 times as large as 
 New York, and the soil as good, but the real estate of the 
 smaller coimty is made v^aluable by the amount of personal 
 property upon it, while the real estate of the larger county is 
 almost valueless, because of the absence of personal property. 
 Within the city itself the real estate of that ward or district is 
 most valuable which has the largest value of personal property 
 upon it. Thus, the diminutive First Ward is assessed at 
 $51,000,000, the vastly larger Nineteenth at $119,000,000, and 
 the still larger Twenty-fourth at only $9,000,000. Any one 
 at all familiar with the city knows that these variations are 
 due to the distribution of personal property, and its owners, in 
 the respective wards. If the Twenty-fourth Ward could secm-e 
 the same proportion of personal property, and its owners, as 
 the First or the Nineteenth, the value of its real estate would 
 increase in like proportion. It is obvious, then, that the end 
 which every o\\Tier of real estate in that ward should seek is 
 to bring personal property within its limits. Once there, 
 whether taxed specifically or not, it can no more escape taxa- 
 tion than a ponderable object can escape the operation of the 
 law of gravitation. 
 
 It may be of interest to note the fact here that in 1876 the 
 
22 
 
 « 
 
 city, with 22 per cent, of the population, taxed 57 per cent, of 
 the personal property specifically assessed in the entire State. 
 
 LETTER VIL 
 
 RELATION OF REAL AND PERSONAL PROPERTY RENTS AJiD 
 
 TAXES HOW VISITORS PAY TAXES — TWO POLICIES IN BUSI- 
 NESS. 
 
 In view of the statements made in the last letter, it must 
 be conceded that the relations between real and personal prop- 
 erty are of the most intimate, and should be of the most 
 amicable character ; and that real estate is dependent for its 
 prosperity upon the presence of personal property, and not its 
 mere presence, but that its conditions shall be such as to make 
 it active, productive, and profitable to its owners. The present 
 depression in tlie value of real estate generally, is not from 
 any inherent cause, that is, any cause originating in and pecu- 
 liar to itself. There is no greater area of real estate in New 
 York than when its price was much higher, but the cause of 
 the decline is attributable only to the condition and circum- 
 stances of personal property. When the merchant finds his 
 stock of goods declining in value on his hands, he must reduce 
 expenses, pay less store and liouse rent, and curtail the pay of 
 his assistants, compelling them in turn to seek lower rents. 
 When a bank reduces its capital, the pay of its officers and 
 clerks also suffers a reduction, and they too seek cheaper rents. 
 When the mechanic and laborer find that their personal prop- 
 erty — skill and physical strength — ^is in less demand and their 
 wages are reduced, or idleness enforced upon them, they also 
 seek cheaper rents, or cease to pay rent. All these classes are 
 consumers, and with diminished means their purchases of per- 
 sonal property are diminished. They buy less of the grocer, 
 the butcher, the tailor, the milliner, and the retailer of diy- 
 goods ; so that the grocer, the butcher, the tailor, the milliner, 
 and the retailer of dry-goods each finds his business, profits^ 
 and power to pay rent diminished ; and as the rent received ir 
 
23 
 
 tlie general basis of real estate values, real estate, under such 
 influences, must of course decline. 
 
 While taxes represented but one-fifth or one-sixth of the 
 rent received by the real estate owner, they could be endured ; 
 but when out of a greatly reduced rent, unreduced taxes take 
 one-third, or perhaps one-half, then the burden is felt to be 
 unendurable, and the real estate owner finds that he has been 
 struck by the calamity which first struck the owners of per- 
 sonal property, and through them reached him. Now, all this 
 proves not antagonism, but harmony and unity of interest. 
 Had no disaster befallen the owners of personal property, it is 
 possible that the wildest dreams of the operators in unimproved 
 property might have been reahzed. 
 
 Real estate is the last interest to feel the effects of a panic 
 or revulsion, and it is also the last to recover. The reason is 
 obvious. The blow falls first upon personal property, and 
 through it is distributed to real estate, which does not feel the 
 full force until the whole structure of society has adjusted 
 itself to the new conditions, imposed by the disasters suffered 
 by the owners of personal property. For a time such disasters 
 are not accepted as final ; there is hope of recuperation ; but 
 at last the fact is accepted, and then the readjustment of ex- 
 penses is resorted to, through which real estate is finally reached. 
 So, too, recovery affects real estate last, as that result must be 
 preceded by the recovery of a degree of prosperity by the 
 owners of personal property in all its multiform shapes, or by 
 an absolute accretion of population. The latter means of re- 
 cuperation is the more rapid, if it can be secured, and that is a 
 question which shall receive consideration. 
 
 It is not the personal property of residents only which pays 
 the taxes in this city, but that of the stranger within our gates 
 who contributes. No visitor can buy a pint of peanuts or a 
 paper of tobacco, a cashmere shawl or a diamond bracelet, can 
 ride in a cab or visit a theatre, can stay a night in a lodging 
 house or board a week at a hotel, without contributing to pay 
 the taxes charged as upon real estate. Not a case of goods, 
 or a bale of cotton, or stick of timber, or a pig of iron can 
 
24 
 
 pass through the city without also contributing to bear the 
 burden of taxation. 
 
 The great object in life, then, of every real estate owner, 
 should be to bring more people here with their personal property, 
 to occupy dwellings and stores ; more visitors to buy peanuts and 
 diamonds ; more bales of cotton and pigs of iron to be handled 
 and stored, and so to distribute the indirect taxes upon them 
 as to make the burden of all taxation comparatively easy to 
 bear. 
 
 In business, two policies are recognized — one is to do a small 
 trade with large profits, and the other is to do a large trade 
 with small profits. The former policy is one of the past, 
 which has been practically abandoned as narrow, illiberal, and 
 ineffective. It is a policy which should not be adopted, 
 and cannot be carried out in the face of competition or oppo- 
 sition in trade. In such a case the competitor dictates the 
 policy. This is, in some sense, the problem which now presents 
 itself for solution to the people of this city, as to which policy 
 they shall adopt. In my judgment they have no choice. In the 
 keen competition for trade, and supremacy in trade, the rival 
 dictates the policy to a certain extent, and nothing but dense 
 stolidity and obstinacy can justify adherence to a narrow and 
 obstructive theory. It is the interest of the real estate owner, 
 which is not only in jeopardy, but in actual suffering. It is 
 for his benefit these letters are written, for his welfare alone is 
 bound up indissolubly with the future of New York, Per- 
 sonal property is migratory and fugitive. A truck or a carpet 
 bag w^ill suffice to remove it ; and a draft or bill of exchange 
 will give it wings. 
 
 The questions of the hour, then, are substantially these : 
 how to keep, how to attract, and how to utilize this life-giving, 
 tax-paying, debt-bearing element, known as personal property. 
 
25 
 
 LETTER VIII. 
 
 NEED OF POPULATION AND PERSONAL PROPERTY HOW THEY ARE 
 
 REPELLED INSTANCES NOT THE POLICY OF BUSINESS MEN. 
 
 Said Mr. Burke, in his great speech on the " True theory 
 of the rights of man : " " In states there are often some obscure 
 and almost latent causes, things which appear at first of little 
 moment, on which a very great part of its prosperity or 
 adversity may most essentially depend." The insidious, but 
 often fatal, effects of noxious gases from defective drains are 
 pretty generally understood ; yet it is often of little use to 
 admonish the man in vigorous health of danger from a cause 
 so remote and ol)scure. But let the poison enter the blood of 
 his family or himself, and he will give heed to statements of 
 facts, and give attention, at least, to suggestions designed to 
 remove the cause. To-day ]^ew York is sick, and may possibly 
 hearken to suggestions which in other conditions would be 
 scouted. 
 
 What New York needs for recovery from the present 
 paralysis in real estate, for the development of her resources, 
 and to assure her predominance in the future, is population 
 and personal property — or to put it more concisely, men and 
 money. Yery well, you say, let them come ! But just there is 
 the difficulty — you won't let them come ; indeed, you will not 
 even let them stay when they have come. Let me illustrate 
 by a few, a very few, facts bearing upon the proposition " to 
 let them come." 
 
 An inquiry was made a few months ago by a member of the 
 Bar as to whether a client of his, not residing here, by remov- 
 ing to this city and investing $250,000 in business would sub- 
 ject that capital to taxation. He said that his client preferred 
 New York as the future scene of his business activity, but that 
 this city did not present such supreme advantages over another 
 city, as to justify him in paying the tax. Witli great reluctance 
 his counsel was told that the law would impose the tax, and he 
 went away sorrowful. 
 
26 
 
 A gentleman from abroad recently brought letters to a mer- 
 chant here, asking his co-operation in assisting the foreigner 
 in obtaining property for establishing'a manufacturing business 
 here with foreign capital. Tlie merchant, in view of the 
 quantity of manufacturing property standing idle, advised the 
 foreigner to advertise for such property. He did so, and was 
 alarmed at the great number of answers received, and pro- 
 ceeded to consult the merchant, who was, in turn, amazed. 
 The foreigner very wisely said, "If I had received a dozen 
 answers, I should probably have proceeded to make my selec- 
 tion, but there must be some special cause that has vacated so 
 much manufacturing property." The merchant advised him 
 to inquire of some of the owners. He did so, and then, for 
 the first, learned that the taxation of capital was literally the 
 moving cause, and that he too would be subjected to it if he 
 invested here. And he also sought another city. 
 
 A gentleman who had made a fortune of several millions, 
 in a distant State, charmed with the brightness and gayety of the 
 city, decided to spend several months in each year here, and 
 entered into negotiations for a house at an annual rent of 
 $10,000. Before they were concluded he learned that he might 
 be subject to a tax upon his personal property, and the charm 
 was broken and the man and the money lost to the city. 
 
 Here are three typical instances. There have been thousands 
 of such within the past ten years, some more, many less, im- 
 portant. " Let them come, " indeed. Why don't you? You 
 keep at large expense a dog to drive them — men and money — 
 off. He is, to be sure, old and nearly toothless, but they don't 
 know that, and he has here and there a tooth which might 
 puncture them. Many have been bitten, but let us hope that 
 it may soon be said : " The man recovered from the bite ; the 
 dog it was that died." Is any other business conducted upon a 
 principle which the above examples illustrate ? Does any dealer, 
 wholesale or retail, tax a visitor for entering his premises i 
 While they are on his premises he protects them, shelters them 
 by his roof, warms them by his fire, gives them water if thirsty, 
 would be liable for damage if they fell through an unguarded 
 
27 
 
 hatch or staii'way. But whether they buy or not, he does 
 not present a tax bill for the "protection" he has given, JSTo, 
 he puts all that in his bill for goods sold, just as the tenant finds 
 it in his rent. The difference between the dealer and the city 
 is this, many may visit the store or shop and few buy, but none 
 can live in the city without in some way paying for such 
 " protection " as he may receive. The customer, like the 
 untaxed personal property, really pays for all the protection 
 received, but in such a way as is not felt, perhaps not even 
 known. 
 
 It cannot l)e necessary to follow out in detail all that the 
 city lost when, as in the cases cited, men and money were turned 
 from the very doors they desired to enter. Every interest 
 would have been benefited and stimulated by their establishment 
 here ; but real estate more than all. These rejected, repelled 
 elements are those for the want of which real estate is languish- 
 ing, rents declining, mortgages foreclosing, ruin impending. 
 These rejected customers and consumers were willing to bear 
 their share of taxation, assessed as upon real estate, to help to 
 pay the debt, and help to pay for the government or misgovern- 
 ment of the city; but they were not willing to incur the risk of 
 being specifically taxed, in addition, upon their personal prop- 
 erty, not acquired here, perhaps not even situated here, and 
 which would contribute so largely to the present welfare and 
 future prosperity of the city. 
 
 This law for taxing personal property has been illustrated 
 by the figure of an old and almost toothless cur. It is well 
 known that it is almost wholly inoperative, owing to inherent 
 defects, and want of adaptation to changed conditions of affairs. 
 Yet this cur barks and scares, has a shadow which blights, and 
 here and there, a fang, which rends unmercifully, when it 
 does penetrate. What shall we do with him^ Send him to a 
 dentist for other and sharper fangs, or provide him with a short 
 rope and heavy stone ? 
 
28 
 
 LETTER IX. 
 
 NATURE OF CAPITAL HOW THE MIDDLE CLASS IS EXPELLED 
 
 INSTANCES AMENDING CONSTITUTIONS. 
 
 The repelling force of tlie law as regards population and 
 capital having been demonstrated, it is proper to consider 
 briefly tlie expelling power of the same law. Capital is timid 
 and fugitive. It may be compared to a gelatinous substance, 
 more of which can be held in the hand when extended open, 
 than when the hand is closed or partly closed. As soon as the 
 hand is bent toward closing, the substance begins to escape, 
 and if an attempt is made to grasp the whole by firmly closing 
 the hand, the whole escapes, and the hand is left empty. Last 
 year the law was for the iirst time strictly enforced in assessing 
 the shareholders of banks, and the immediate result was a gain 
 of some $10,000,000 of assessable capital ; but the result this 
 year will probably be a loss of $20,000,000 as compared with 
 1876, or a net loss of $10,000,000 as compared with 1875. 
 This result is brought about by the distribution of surplus 
 funds and the reduction of capital, and is referable chiefly to 
 the increase of taxation upon that class of property, aided, it 
 is- true, by other contributing causes. The direct and con- 
 tingent effects upon real estate, and upon the general business 
 character and interests of tlie city, are most damaging. 
 
 A positive result of the specific taxation of personal prop- 
 erty has been to drive an immense number of the middle class 
 iifrom the city. People who, by their industry and frugality, 
 or by inheritance, have acquired from $20,000 to $50,000, 
 deemed themselves able to live in such degree of comfort, as 
 their more or less frugal habits demanded, in this city, where 
 their " best friends and kindred dwell." But when, in addi- 
 tion to the indirect taxation, they are subjected to a specific tax 
 reaching all their personal property, they wrench themselves 
 from social and family ties, and seek a home beyond the city 
 limits. If they occupy a hired house, it is thrown upon the 
 hands of the owner; if they own a dwelling, it is put in the 
 market to let, and comes in competition with other unrented 
 
29 
 
 real estate, to its detriment and loss. These people are con- 
 sumers, and, as explained in the seventh letter, all trades and 
 business suffer, but the ultimate loss reaches the owner of real 
 estate. Are these people to blame ? Let us see. A man has 
 lS30,000 invested on bond and mortgage, the accumulation of a 
 life of labor and saving. The income of $2,100 gives him a 
 living with which he is content. Out of it he pays the taxes 
 on his own or his landlord's house, and helps all of whom he 
 buys, to pay their rents and taxes. But when the city steps in 
 and takes $840 out of his $2,100 of income (at the rate of 
 last year), he is at once reduced below his standard of com- 
 fortable living, and neither social nor family ties, love of the 
 scenes of his childhood and success, nor pride in the city of his 
 birth or adoption will detain him. Sadly he gathers his house- 
 hold goods and seeks a place whose sole recommendation is 
 that he will not be taxed. His action is simply dictated by the 
 instinct of self-preservation, ovei-powering all social senti- 
 ments. 
 
 Can they do better elsewhere ? They can. A party was 
 assessed here for $150,000, and his last tax bill was over 
 $4,000. He has gone where he is assessed $10,000, and his 
 annual tax bill is $150. Another was assessed here $25,000, 
 and he has gone where he is assessed $1,000. There would be 
 a far more extensive exodus from this city, but for the fact 
 that so many investments are exempt, under the constitution 
 and the law, from assessment. A gentleman said recently : 
 " I would not stay in this city thirty days if my large capital 
 in business could be taxed ; my wife would object to leaving 
 the city, but I should overrule that, and as my capital is in im- 
 ported goods, protected from local taxation by the Constitution 
 of the United States, why, I remain." 
 
 Let me relate the observation of a single day not a month 
 old. A gentleman advanced in years was assessed, and paid, 
 on $29,500 last year. This year he remains on his little place 
 in the country, and the tax and the man are lost to the city, 
 where his custom had been and his desire was to spend eight 
 or nine months each year. A younger man, with a modest 
 
30 
 
 competence acquired in trade, whose retirement from business 
 was enforced by delicate health, is driven away by an assess- 
 ment of $15,000. Another gentleman, assessed for $85,000, 
 will pay it this year for the last time, as he will go abroad to 
 reside — a measure he had held in doubtful contemplation, but 
 which was decided by the tax. There have been thousands of 
 such cases within the past ten years. 
 
 Here is a process of depletion going on, a leak unknown 
 and unnoticed — " an obscure and almost latent influence," as 
 defined in the extract from Mr. Burke's speech — which, in 
 time, would arrest the development of any city, and hand over 
 her sceptre of supremacy to an ambitious and far-seeing rival, 
 I would be glad if these letters could be read by the real estate 
 owners of New York only, for I hate to encourage a rival with 
 the knowledge that this city is afflicted with a running sore, 
 draining its energies, and threatening premature decrepitude. 
 But a faitlif ul diagnosis is essential to the cure of the sick man. 
 
 An inquiry was made a few days ago, at a casual meeting 
 of several gentlemen largely interested in the prosperity of the 
 city, as to what were the hindrances to the enactment and 
 enforcement of an equitable law which would reach every de- 
 scription of personal property, and so distribute the burden as 
 to make it nominally light on all. The answer was that to do 
 this only three things were necessary : 
 
 First — To amend the Constitution of the United States. 
 
 Second — To amend the Constitutions of the otlier States. 
 
 Third — To amend the constitution of human nature. 
 
 The Constitution of the United States would have to be 
 amended, for under it full one-third of the personal property 
 in this city is placed beyond the reach of State tax laws. 
 
 The Constitution of other States would have to be amended, 
 so that their laws shall conform to yours, or you might as well 
 bum down certain business portions of the city as to attempt 
 to enforce such a law in the face of competing rivals with 
 more liberal tax laws. 
 
 The constitution of hiunan nature would have to be 
 amended, or personal property would fly to other countries. 
 
31 
 
 beyond the reach of your amendments, impelled by the instinct 
 of self-preservation. 
 
 It is evident that something ought to be done, and done 
 quickly, but that must be the subject of another letter. 
 
 LETTEK X. 
 
 THE MASSACHUSEITS TAX LAW PRETENSIONS AND DEFECTS OF 
 
 THE NEW YORK LAW AIDLNG OTHER STATES AT HER OWN 
 
 COST. 
 
 The City of New York has, in reference to the subject 
 immediately under consideration — the taxation of personal 
 property — two diverse courses open before her, either of them 
 better than to maintain the present condition of things, which 
 is simply suicidal and ruinous. Her future greatness depends 
 largely upon the choice. The first course would be to tax per- 
 sonal property in every conceivable form pennitted by the 
 Constitution. To accomplish this result, the law of Massachu- 
 setts would furnish, probably, the best model. Under it 
 every " inhabitant " in that State is required to fill up a 
 schedule, to be sworn to, setting forth the value of his posses- 
 sions on the 1st day of May in each year, in mortages, money 
 at interest, and other debts due him. Only from these items 
 is he allowed to deduct the debts he owes. All other items 
 must be taxed without deduction for debts. They include 
 cash on hand ; goods, wares, and merchandise within or with- 
 out the State ; machinery, tools, implements of trade ; (exceed- 
 ing $300,) income (above $2,000) from profession, trade, or 
 employment ; income from annuities ; vessels, or parts of ves- 
 sels at home or abroad ; horses and vehicles ; furniture ; (ex- 
 ceeding $1,000,) shares in corporations, including those pledged 
 as collateral ; public stocks, railroad bonds ; other personal 
 property not enumerated ; personal property belonging to wife 
 and minor children, or held as executor, administrator, or 
 trustee. There is, besides, a jjoll-tax to reach the person. 
 
32 
 
 If New York thinks proper to adopt the commercial policy 
 referred to in the seventh letter, of doing a small business at a 
 hirge profit, then enact a law similar to the above, and at the 
 ■same moment accept the fact that those rivals whose policy is 
 to do a large business with small profits, will leave this city far 
 behind in the competition for business. The first effect of the 
 adoption of such a law would probably be to raise the assess- 
 ments on personal property in this city from some $200,000,000, 
 to some $900,000,000, or even more, and reduce the nominal 
 rate of taxation to $1.50 or $1.40 upon the $100. But a reac- 
 tion would follow almost immediately, and the amount of the 
 assessment would decline. Real estate would be relieved of a 
 part of the tax, but it would also be relieved of a part of its 
 occupants, and find it more diflicult to pay tlie smaller sum 
 than the larger. Better pass such a law, how^ever, than do 
 nothing. A Legislature — even the General Court of Massachu- 
 setts — cannot by enactment, make w^ater run up hill ; a man 
 cannot violate the laws of his physical being with impunity, 
 and a State cannot violate the unwritten laws of trade without 
 paying the penalty. In mitigation of that penalty, Massachu- 
 setts has repealed her usury law, so that by agreement any 
 rate of interest may be legally charged and paid in that State, 
 and even loans on mortgage may be fixed at 8 or more per 
 cent., and so the mortgagee is able to indemnify himself for 
 the tax by charging the same and a little more to the mort- 
 wio-or. This is not tlie entertainment to which the owners of 
 real estate in this city desire to be invited. 
 
 From a singularly able and exhaustive treatise upon " Tax- 
 ation in Massachusetts," by William Minot, Jr., Esq., just issu- 
 ed, the following extract shows the ridiculous provisions of 
 the laws in that State, when the absolute effects are formu- 
 lated into declarations of penalties and bounties : 
 
 " That if any citizen invests money in sliips sailing from one of our sea- 
 ports rather than in a ship whieh sails from Philadelphia, for instance, 
 he shall forfeit for sucli offense annually the sum of $15 for every $1,000 
 so invested. 
 
 " That if any person, not an inhabitant of this State, invests in any ship 
 
33 
 
 sailing from this port, rather than a ship sailing from Philadel]jhia, he 
 shall forfeit, annually, for every |1,000 so invested, $15. 
 
 "Tiiat if any foreigner endeavors to promote the prosperity of this 
 Commonwealth by loaning money to build houses, railroads, mills, or fac- 
 tories, or in aiding by investment any business enterprise, he shall forfeit 
 for every $1,000 so invested, the sum of $15 annually. 
 
 " That if any inhabitant or foreigner attemps to assist the prosperity of 
 the State, by investing money inland or goods which he borrows money 
 to pay for, he shall forfeit for every such offense, in addition to the full 
 tax on such lands or goods bought, the sum of $15 annually, for every 
 Si, 000 so borrowed. 
 
 ' ' If any person attempts to open and sell any package of imported 
 goods, he shall forfeit for sucli offense the sum of $15 for every $1,000 
 worth of goods so opened and sold. 
 
 •' If any person removes personal property of any kind from this State, 
 he shall receive a reward of $15 annually, for every $1,000 so removed. 
 
 " If any person brings personal property into this State, he shall forfeit 
 $15 annually for every $1,000 so brought in. 
 
 "If any person, being worth $1,000,000 in personal jjroperty, will re- 
 move to the City of Newport, build a house there and assist its pros, 
 perity, he shall receive an annuity from the State of Massachusetts of 
 $15,000. 
 
 "If any person living in Newport, having $1,000,000, comes to live 
 witliin this State, he shall forfeit for such offense the sum of $15,000 
 annually." 
 
 Tlie law of the State of New York is a specimen of preten- 
 tious mendacity. See how it menaces all kinds of personal prop- 
 erty, when it defines as subject to taxation " all household 
 furniture, moneys, goods, chattels, debts due from solvent 
 debtors, whether on account of contract, note, bond, or mort- 
 gage, public stocks, and stocks in moneyed corporations." 
 Munchausen never crowded so many lies in so few lines. 
 Still the menace is there, with all its repelling and expelling 
 force. Under its pretension more than $5,000,000 have been 
 wrongfully paid in the last 10 years to the City, because tax- 
 payers were ignorant of their rights under the law. 
 
 The tax laws of the State of New York were enacted 50 
 years ago, and were but imperfectly adapted to the require- 
 ments even of that day. The machine then devised has had 
 cog-wheels taken out by the courts, crank-pins removed by the 
 
 3 
 
34 
 
 Legislature, new forms and methods in business have rendered 
 portions inoperative, and it has been submerged by the issue 
 of more than $2,000,000,000 of Government bonds, notes, 
 etc., untaxable, and yet it is expected to work. One might as 
 well expect usefid and effective work from the Cleremont — 
 Fulton's first steam-boat — in conipeti'ion with the steamers of 
 the present time. For a statement of the utter inefficiency 
 and uselessness of the law as a means of revenue, I refer to 
 an address before a legislative committee in 1874.* It may 
 be said that the Massachusetts law works well in that Com- 
 monwealth, and it is true that it does work moderately well, 
 reaching, perhaps, from one-half to two-thirds of the property 
 assessable. The people of that State have for generations been 
 trained to submit to such methods, but the probability that the 
 people of the State of JSTew York will, at this date, impose 
 upon themselves a law so inquisitorial and oppressive, is as 
 remote as the enactment by them of the old blue-laws of Con- 
 necticut. It is worthy of note, too, that the fact that this 
 State pretends to have a personal tax law is a buttress which 
 enables Massachusetts to maintain such a law upon her statute- 
 book ; because it is admitted by the highest authority that if 
 New York should adopt a more liberal and enlightened policy, 
 Massachusetts would have to follow by the relaxation of her 
 laws. 
 
 New York, then, occupies this extraordinary position : She 
 is, to her own great detriment, adding to the resources of two 
 adjoining and competing States. On the one hand, Massa- 
 chusetts is sustained in her narrow policy, which, however, is 
 effective in increasing her revenues, and is enabled to adhere 
 to traditional methods, because New York pretends to do the 
 same, yet does not do it in any effective way. On the other 
 hand, Pennsylvania is sustained in her more liberal policy of 
 practically excluding personal property from taxation, and 
 reaps the most solid advantages by additions to her population, 
 trade, and manufactures of those driven or diverted from this 
 city by our laws professing to tax personal property, but which 
 * See extract in Appendix. 
 
35 
 
 are in effect a sham, a bugbear to frigliten, and not an agency 
 to secure revenue. Is not New York, so situated and so acting 
 in promotion of tlie welfare of other commonwealths at 
 the sacrifice of her own, the most magnanimous of States? 
 or is she the most stolid ? The situation justifies the repetition 
 of a figure used before, that " New York is, like Issachar, ' a 
 strong ass crouching down between two burdens.' " 
 
 It remains to be determined whether New York will con- 
 tinue to " look back," or whether, casting off the schackles 
 which impede her, she will press forward, and cany the prize 
 she won in other days quite beyond the reach of rivals. It is 
 in her power to do it, as I hope to show. 
 
 LETTER XL 
 
 PLAN OF A BENEFICIAL TAX LAW SPECIFIC ADVANTAGE TO REAL 
 
 ESTATE FREE TRADE IN MONEY. 
 
 While conceding that it would be better to adopt the Mas- 
 sachusetts mode for taxation than to do nothing, the tax laws 
 of Pennsylvania, enacted some ten years ago, present a model 
 far more desirable as a means of promoting the future growth 
 and welfare of New York. The theory of the law in ques- 
 tion is the practical exemption of personal property fi'om di- 
 rect municipal taxation. This mode is, to be sure, disfigured 
 by some petty details at variance with its general character, 
 such as the taxation of furniture, vehicles, and watches, more 
 effective as sources of annoyance than of revenue. The out- 
 line of this s^^stem was pretty fully presented to your readers 
 a year ago, and it is not proposed to repeat it here. The main 
 feature is the taxation of corporations directly by the State for 
 the revenue of the State, and the relief of the land from taxa- 
 tion for State purposes. 
 
 The laws for taxing coi-porations in the State of New York 
 are shamefully confused and inefiicient, and an enormous 
 amount which might be secured as revenue is suffered yearly 
 to run to waste. Except a special act for reaching indirectly 
 
86 
 
 the capital and surplus of banks, there has been no legislation 
 to adapt the laws taxing corporations to the changed condition 
 of the financial affairs of the country growing out of tlie 
 creation, under the Federal laws, of thousands of millions of 
 non-taxable money and securities. The assessment of corpora- 
 tions is left to many hundred Assessors in the State, not ten 
 of whom can possibly be iamiliar with the laws, and the vari- 
 ous interpretations placed upon them by the courts. Doubts 
 also are frequently arising as to the place where coi-porations 
 are liable to be taxed. 
 
 Now, all this loss and confusion would be avoided if the 
 corporations were assessed by the State Assessors, under a code 
 to be wisely adjusted so as to distribute taxation equitably, 
 with reference to the means, condition, and purposes of the 
 corporation ; keeping the tax below the repelling and expelling 
 point, and recognizing the claims of manufacturing and pub- 
 lishing corporations to consideration. The real estate interest 
 would reap a substantial and material advantage in relief from 
 the State tax, and corporations, when each class should be 
 equitably and uniformly taxed, would cease to be the objects 
 of jealousy and distrust. The real estate of corporations 
 should be taxed where it is situated, as at present, and, if de- 
 sired, every county except New York might continue to tax 
 personal property for local purposes, omitting, of course, the 
 capital of coi-porations taxed by the State.* 
 
 But, says the owner of real estate, you propose to add to 
 the burden upon my property. Let us see about that. Loans 
 upon bond and mortgage are to a very great extent, as the 
 effect of our present tax-laws, limited to institutions whose in- 
 vestments in such securities are specifically exempt from taxa- 
 tion by law, and to residents of other States and countries be- 
 yond the reach of our tax-laws. The shadow of the tax-law, 
 however, rests upon this class of investments, and the effect 
 has been to keep the rate of interest upon this — the highest 
 possible grade of securities — at a rate full 1 per cent, above 
 what it would otherwise be. The institutions whose invest- 
 
 * For further details of this plan see Appendix. 
 
37 
 
 ments in mortgages are exempt by law are enabled to obtain 
 7 per cent., because there is practically no competition, as a 
 private lender generally dare not make sucli an investment for 
 fear of the tax. Remove that fear and capital would gladly 
 seek an investment so safe at a lower rate of interest. It is 
 estimated that the real estate of the city is incumbered by 
 more than $4:00,000,000 of mortgages, and a saving of 1 per 
 cent, upon that sum is $4,000,000 annually. 
 
 The debt upon which the city pays interest is in gross 
 something like $120,000,000, all of which is liable to taxation, 
 and for that reason is held chiefly by such institutions as hold 
 bonds and mortgages, and by non-residents. It is not at all 
 diffused among the people. The interest upon this sum is full 
 1 per cent, higher by reason of this mere liability to taxation 
 than it would otherwise be. Remove this liability, and ulti- 
 mately the debt could be placed at a rate of interest at least 1 
 per cent, less than is now paid. In view of the fact that the 
 whole of this benefit could not be at once realized, let the 
 saving from this source be called only $1,000,000. per annum. 
 The sum to be paid for the State tax this year is a trifle over 
 $4,000,000. This amount would be a direct and immediate 
 saving. 
 
 ]^ow look at the other side. The sum to be realized from 
 personal taxes this year will probably not exceed $5,000,000, 
 and if the law is suffered to remain unchanged, the probability 
 is that hereafter it will continue to dwindle. How would the 
 account as affecting real estate stand then ? 
 
 Real estate would save on State tax $4,000,000 
 
 Real estate would save on interest of city debt . . . 1,000,000 
 Real estate would save 1 per cent, on $400,000,000 
 
 mortgages 4,000,000 
 
 Total gain $9,000,000 
 
 Real estate would lose tax on personal property . . 5,000,000 
 
 Net gain to real estate $4,000,000 
 
 I have not a shadow of doubt, if such a system were 
 adopted, that within seven years the rate of taxation upon real 
 
38 
 
 estate would fall below 2 per cent., provided that the general 
 expenses and debt of the city should not be materially in- 
 creased during that period. 
 
 The diminution in the rate of interest upon mortgage loans. 
 is not a mere chimera evolved from the mind of an enthusiast^ 
 who invests his statements with gorgeous but unreal possibili- 
 ties. The Real Estate Record of Feb. 24 says, in relation to 
 the exemption of mortgages from taxation, and the resulting 
 reduction in the rate of interest : " The freedom which will be 
 thus afforded in the negotiation of mortgage loans will redound 
 to the benelit and prosperity of real estate interests in ways 
 innumerable, and with effects whose bare contemplation is 
 dazzling to the imagination." 
 
 It cannot be necessary to add to what has already been said 
 to demonstrate how essential it is to the future welfare of New 
 York that she should be able to announce to the world that 
 her settled policy and declared motto is, ^"-Free Trade in Money T 
 That is to say, that money, and personal property representing 
 money, shall not be specifically taxed in this city. 
 
 If population is to be speedily and largely increased ; if 
 capital is to be attracted, held, utilized ; if empty houses and 
 stores are to be tenanted ; if vacant property is to be built 
 upon; if costly improvements are to be made available; if 
 projected improvements are to be given effect ; if trade is to be 
 augmented ; if the entire real estate interest is to be revived ; 
 if manufactures are to be established ; if the poor are to find 
 employment ; if the middle class is to be recalled and retained ; 
 if brightness is to replace gloom, and sunshine cloud ; if the 
 future of New York as the chief poit, the financial centre, and 
 the commercial metropolis of the country is to be assured, it 
 must be under a banner whose device shall be, " Free Trade in 
 Money." 
 
39 
 
 LETTEK XII. 
 
 SOME CONCLUSIONS THE GKAIN TRADE ADVANTAGES OF NEW 
 
 YOKK THE FUTURE. 
 
 Thus far it lias seemed my duty to present statements, some 
 of them of a depressing tendency, not from a desire to depress, 
 but because such was the inherent character of the truths that 
 needed to be presented, in order to obtain a full understanding 
 of the case. It accords far better with my disposition and 
 temperament to dwell in sunshine than in gloom ; so let us 
 gather into conclusions the experience and lessons of the 
 past. 
 
 If New York could for ten years develop her resources and 
 energies, unfettered, under the advanced policy of Free Trade 
 in Money, as described in the last letter, and a proposition 
 should then be made to restore the present restrictions, the 
 real estate interest would be the first to protest against such a 
 suicidal pohcy. If the government were to attempt to restrict 
 free trade in money in Paris by the incumbrances which now 
 fetter the energies and hinder the development of New York, 
 revolution would be the result. New York ought to be — can 
 be — the Paris of America. New York ought to be — can be — 
 more than that, for she can be and remain what she now is, as a 
 money centre and a commercial power on this continent, what 
 London is to Europe. With no restrictions to hinder her 
 development, she may, ultimately, grasp the sceptre of financial 
 supremacy, and become the source and centre of financial 
 power in the world, which ages ago had its seat on the 
 Adriatic, and afterward, on the Amstel, and now on the 
 Thames, and may, in the future, find its home on the Hudson. 
 But the present interest is centered in the immediate future. 
 
 The diversion of the grain trade from New York is illus- 
 trated by tlie following table from the Railroad Gazette of 
 
40 
 
 February 23, showing the percentage of tlie total receipts at 
 each port for eleven years : 
 
 
 o 
 
 Boston. 
 
 New York. 
 
 Philadelphia. 
 
 o 
 
 a 
 
 P5 
 
 S o 
 < 
 
 1866 
 
 10.9 
 
 10.3 
 
 7.8 
 
 11.0 
 
 9.7 
 
 10.3 
 
 10.3 
 
 11.4 
 
 9.3 
 
 9.6 
 
 9.0 
 
 11.6 
 13.5 
 11.0 
 10.0 
 10.4 
 
 9.6 
 10.0 
 10.3 
 
 9.3 
 10.3 
 10.7 
 
 61.2 
 55.3 
 57.9 
 55.0 
 55.7 
 57.0 
 53 4 
 53.8 
 55.8 
 53.3 
 45.8 
 
 7.7 
 8.8 
 11.7 
 13.3 
 13.3 
 13.9 
 14.3 
 14.3 
 13.8 
 15.7 
 16.8 
 
 8.6 
 13.1 
 11.6 
 11.7 
 11.9 
 10.3 
 13.3 
 11.3 
 13.9 
 13.3 
 17.7 
 
 38.8 
 
 1867 
 
 44.7 
 
 1868 
 
 1869 
 
 1870 
 
 43.1 
 45.0 
 44.3 
 
 1871 
 
 43.0 
 
 1873 
 
 46.6 
 
 1873 ■.. 
 
 47.3 
 
 1874 
 
 44.3 
 
 1875 
 
 47.7 
 
 1876 
 
 54.3 
 
 
 
 Notwithstanding the relative decrease, there has been a very 
 large actual increase in the receipts at New York ; for while 
 our receipts in 1866 were only 58,500,000, they were in 18Y6, 
 97,000,000 bushels. In exports of grain, however, while New 
 York has increased only 1,000,000 from 1873 to 1876, Phila- 
 delphia has risen from less than 5,000,000 to more than 22,- 
 000,000, and Baltimore from 9,000,000 to more than 24,000,000 
 bushels during the same period. The Gazette goes on to say : 
 " The long monoply of exports which New York has enjoyed has made 
 it possible to introduce and maintain a rate of taxes for handling, and 
 merchants' dues at the terminus, such as would have been impossible 
 had the competition of the other ports l)een sharper. It is conceded, we 
 believe, that New York takes larger tolls than any other port out of the 
 grain exported, and the grain merchants finds it very difiicult to reform 
 this. The business is old ; the methods of doing it long established ; a 
 large number of influential people are interested in preserving every tax 
 on the grain; and there is much greater difficulty in combining to intro- 
 duce a reform than wlien the business is comparatively new and abuses 
 less firmly rooted." 
 
 This reference to the influence of taxes imposed by those 
 handling grain, confirms the view already expressed of the 
 
41 
 
 power of specific taxation to divert capital and trade. The 
 evil complained of is one wliicli will work its own care, al- 
 though the interests of the city may first suffer some damage 
 as the parties imposing the tax will be the heaviest sufferers in 
 consequence. If the city is to retain its proportion of the grain 
 trade, charges must be reduced and facilities improved. The 
 proposition to widen West street claims as its recommendation 
 that it will promote the latter object. Boston is now consid- 
 ering a somewhat similar proposition, to bring the ship and 
 the cargo together. Important as the grain trade is, and strenu- 
 ously as New York should exert herself to retain it, it is a 
 still nobler aim to develop all her resources, and strengthen all 
 her interests, so as to.be in no considerable degree dependent 
 upon any one branch of trade. London has seen Liverpool 
 grow with wonderful rapidity, without feeling alarm or suffer- 
 ing injury. So, too, may aSTew York, without jealousy, see 
 minor cities thrive and prosper, provided always, that care be 
 taken to strengthen the position of the city in all its general 
 business relations and resources. 
 
 The water-ways of the State, and the proximity of the city 
 to the ocean, are advantages no other city possesses combined. 
 Montreal may have even superior water-ways, but she is re- 
 mote from the sea. Boston is as near the ocean, but enjoys 
 no water-ways. Beyond the caprice of railroad managers, 
 subject to the vagaries of no corporation, ISTew York has, and 
 always will have, cheap and easy access by water to products 
 and markets, liable only to the temporary reign of the ice-king. 
 This is an unquestionable advantage, only do not let it be made 
 the foundation of a presumptuous confidence. Even this 
 splendid heritage may be impaired by restrictive legislation 
 and bad administration ; and alert and ambitious rivals are 
 ready to take, as they have already taken, advantage of such 
 errors, through the agency of railways devoted to their re- 
 spective interests — neutralizing to a large extent the benefit of 
 our water-ways — to the detriment of the commerce of this 
 
 city. 
 
 Debt and taxation are most formidable difficulties with 
 
42 
 
 which to contend. The enforcement of rigid economy in 
 the present condition of affairs will give partial, but im- 
 mediate relief. Free trade in money will give ultimate and 
 final relief, by retaining and attracting residents with their 
 property. If the population of this city were fifty per cent, 
 larger than it is, expenses need not in consequence increase in 
 any such proportion. Such an accretion ought not to add over 
 ten per cent, to the current expenses. This, it is true, has not 
 been the experience of the past, for when population has 
 doubled expenses have more than doubled. Want of vigilance 
 on the part of taxpayers suffered such things to be. The ad- 
 dition of twenty, thirty, or fifty per cent, to the population 
 would add enormously to the taxable resources of the city, by 
 furnishing occupants at fair rents for buildings already com- 
 pleted, and requiring the construction of many others. Such 
 an addition is possible, nay, certain, provided you will only let 
 them come ; and so the rate of taxation would be reduced, and 
 the debt would begin to melt away. 
 
 Such an increase in population would also solve the problem 
 of rapid transit, for which an imperious necessity w^ould then 
 arise. Capital invested in such an enterprise would then feel 
 sure of sufficient return ; and the question is always one rather 
 of capital than of engineering. 
 
 As to the physical situations of the business of the city in 
 the immediate future, they are likely to adhere, in the main, to 
 the lines already established, with a constant tendency to up- 
 w^ard expansion as the city grows. Much of the river fronts 
 will be occupied by warehouses and factories ; the lower por- 
 tion of the city by banking rooms and offices for the transac- 
 tion of business in all its varied forms of buying and selling 
 imports, exports, and commission goods, which need not find 
 storage in the office building. The lowxr central portion will 
 be the site of such jobbing houses as changed conditions, 
 already noticed, permit to remain here. The central portion 
 will be occupied by manufacturers of the smaller wares who do 
 not value proximity to shipping. The upper central part by 
 stores and bazaars of a style to attract, as they now do, visitors 
 
43 
 
 to the city, and above these the mansions of the affluent, 
 flanked nearer the rivers by the dwellings of those who desire 
 moderate rents and access on foot to their avocations. The 
 annexed district, constituting the upper wards, will be occu- 
 pied by families owning their homesteads, having easy and 
 cheap access thereto by steam roads ; and the splendid sites on 
 the elevated portions will be adorned by elegant mansions and 
 villas, adapted to the capabilities of the grades and the tastes of 
 opulent owners. 
 
 New York may not in the future be the centre of the jobbing 
 trade, for that trade will have many local centres. But as the 
 centre of the importing, exporting, commission, and financial 
 business of the continent; as the dwelling place 'of the rich, 
 the cultured, and the refined ; as the centre of all that is most 
 enterprising and progressive in journalism ; as the site of man- 
 ufacturing industries ; as possessing shops filled with the choi- 
 cest fabrics ; as the home of mechanics and laborers of every 
 grade ; as the seat of all that is of exalted interest in science 
 and art ; as the situation of the best schools in literature, in 
 medicine, and in law ; as offering in her religious temples the 
 richest and most solid architecture, and in her pulpits the 
 highest and most varied talent ; as presenting in her places of 
 amusement attractions* adapted to every taste ; as affording en- 
 tertainment of the most alluring character in her hotels ; and as 
 a resort for those who travel for business, pleasure, or instruc- 
 tion, New York has a magnificent future before her if she can 
 be allowed, free and unfettered by artificial restraints, to attain 
 it. 
 
 In many respects New York has already attained these excel- 
 lences, but when, under the stimulus of free trade in money, 
 two million people shall throng her busy streets, her present 
 attainments will sink into insignificance as compared with the 
 future, if she be allowed to advance with free and elastic step, 
 not impeded by the oppressive and repressive influences of ob- 
 structive and barbarous laws. 
 
 When her truant sons and daughters— made truant by these 
 laws— shall return: when capital shall be welcomed and 
 
44 
 
 not rejected ; when those who have acquired a competence 
 here shall be permitted to remain here to enjoy and diffuse 
 its benefits ; when men who have acquired a competence else- 
 where shall be permitted to come here to enjoy and diffuse its 
 benefits ; then, indeed, a diadem shall deck the brow of this 
 queenly city, gemmed with the stars of peaceful conquests. 
 Then shall the treasures of the world be made subsidiary to 
 her greatness. Then shall this fair city sit enthroned at the 
 confluence of the waters which shall bear upon their bosom 
 the wealth of nations as her tribute. Then shall her banner 
 float over her citadel bearing the legend " Feee Trade in 
 Money." And so shall the Future of 'New York be attained. 
 
 But, inquires some cynic, why do you vex the public ear 
 with complaint ? Because, sitting as I have been for several 
 years with my finger, as it were, upon the patient's pulse, I 
 have detected evidence of an enfeebled circulation, that 
 arrested development is at hand, and that atrophy may not be 
 distant. The cause is artificial. The remedy indicated is 
 increased nutriment — in the form of population and personal 
 property — without a free circulation of which real estate will 
 come to be dry bones. I could not have said less and dis- 
 charged my duties as a citizen. I am content to say no more. 
 
 GEO. H. ANDREWS. 
 New Yokk, March, 187Y. 
 
APPENDIX. 
 
 INCONGRUITIES OF THE PRESENT LAWS. 
 
 The following is an extract from an address before the Committee on 
 Ways and Means of the Assembly of the State of New York, by Mr. 
 Andrews, in October 1874 : 
 
 " The inequalities and incongruities of the law taxing personal property 
 may be very well illustrated by a series of contrasts, as follows : 
 
 A has 1100,00 
 
 of imported goods, 
 
 and 
 
 is exem2}i. 
 
 B 
 
 miscellaneous goods, 
 
 " 
 
 taxed. 
 
 C 
 
 goods consigned. 
 
 " 
 
 exemft. 
 
 D 
 
 goods owned. 
 
 " 
 
 taxed. 
 
 E 
 
 goods manufactured in N. J., 
 
 (( 
 
 exempt. 
 
 F 
 
 in city, 
 
 a 
 
 taxed. 
 
 G 
 
 goods for wliich he borrowed 
 
 
 
 
 capital on U. S. Bonds, 
 
 " 
 
 exempt. 
 
 H 
 
 goods which he sold U. S. Bonds 
 
 
 
 
 to pay for, 
 
 " 
 
 taxed. 
 
 I 
 
 in ships plying from this port, but 
 
 
 
 
 registex'ed in Boston, 
 
 " 
 
 exempt. 
 
 J 
 
 in ships plying in the Pacific, but 
 
 
 
 
 registered here. 
 
 n 
 
 taxed. 
 
 K 
 
 in mortgages on N. J. property, int. 
 l^aid in Jersey City, and mort'gs. 
 
 
 
 
 deposited there, 
 
 " 
 
 exempt. 
 
 L 
 
 in mortgages on city property, 
 
 
 taxed. 
 
 M 
 
 money in his pocket. 
 
 " 
 
 exempt. 
 
 N 
 
 bank. 
 
 " 
 
 taxed. 
 
 
 
 certf. dep. in Sub-Treasury, 
 
 " 
 
 exempt. 
 
 P 
 
 •' bank. 
 
 " 
 
 taxed. 
 
 Q 
 
 specie in the Assay Office, 
 
 " 
 
 exempt. 
 
 R 
 
 " his safe. 
 
 (( 
 
 taxed. 
 
 S 
 
 check on U. S. Treasury, 
 
 " 
 
 exempt. 
 
 T 
 
 on Ijank, 
 
 
 taxed. 
 
 U 
 
 Treasury notes. 
 
 " 
 
 exempt. 
 
 V 
 
 Promissory notes. 
 
 " 
 
 taxed. 
 
 w 
 
 of United States Bonds, 
 
 
 exempt. 
 
 X 
 
 of State or City Bonds, 
 
 " 
 
 taxed. 
 
 Y 
 
 in certf. of indebt. of U. S., 
 
 " 
 
 exemj)t. 
 
 Z 
 
 " '' a corporation. 
 
 
 taxed. 
 
 "And if the 
 
 alphabet had been longer my statement had been 
 
 stronger. 
 
46 
 
 " Call you that a system ? Is that just ? Is that equitable ? Should a 
 State great in commerce, in agriculture, and in manufactures, continue to 
 countenance, and attempt to enforce laws wliicli oi^erate so unequally ? 
 Can any man or any Board administer such a medley satisfactorily ? You 
 cannot hold fluid in a cask if a stave be missing ; here, a bakers dozen 
 are o"one — gone as irrecoverably as the years before the flood." 
 
 PKOPOSED SYSTEM OF TAXATION. 
 The following is an extract from a letter addressed to the M^j'or of 
 New York in February 1876 : 
 
 " The presentation of some of thefeatures of the tax laws of Pennsylvania 
 has not been for the purpose of recommending them as a standard to be fol- 
 lowed literally and in detail, but for the purpose of showing tliat that 
 o-reat commonwealth, lying contiguous to ours, and closely resemljling it 
 in population, area and resources, has ventured to cut loose from traditional 
 customs and usages, and successfully adopted methods and systems in 
 harmony with the changed conditions of flnancial and business affairs. 
 
 "The vital principle underlying the present system iutliat State is the 
 separation or division of the subjects of taxation by and between the 
 State and the municipalities. The State selects its objects of taxation, 
 and says to the counties : ' I will take these and leave you those.' It is 
 an accepted saying that 'if two men ride one horse, one must ride 
 behind;' but, physically, as to creatures, and economically, as to tax- 
 ation, it has been found more convenient and advantageous for each to 
 have a horse of his own. That is the very substance of the proposition I 
 respectfully submit. While two ]iowers tax the same object there must 
 always be abundant occasion for contention and friction. 
 
 "I do not propose to exempt all personal property from taxation. On 
 the contrary, I propose to reach hundreds of millions that now escape, 
 and suV)ject all tiiat is taxed to the operation of just and equal laws, to 
 be justly and equally administered by the authorities of the State. 
 
 " As to real estate : That I propose to relieve entirely from the burden of 
 State taxation and from the inequalities and, perhaps I might say, op- 
 pression of State equalization, which, even if made well and fairly, will 
 never, to a large portion of the taxpayers, seem to be so made. 
 
 " The suggestions I have to make are briefly these: 
 
 " 1. That all corporations created by or doing business in the State 
 shall be assessed Ijy the State Assessors, upon sworn returns, to be sent 
 to them in Albany, and the taxes paid directly to the State Treasurer. 
 
 ' ' 2. That the taxes shall be fixed upon tlie value of the stock, a per- 
 centage upon gross receipts, or in proportion to dividends, including scrip 
 and stock dividends, at such rates as will attract capital and yet yield a 
 large revenue ; and that the scale of taxation be so adjusted as not to 
 call for any deduction for investments in real estate. 
 
47 
 
 " 3. That discrimination shall be made in tlie rate of taxation upon 
 corporations, formed under the general manufacturing law, so as to foster 
 sucli interests so far as may be practicable and equitable. 
 
 ' ' 4. That if it shall be found necessary to secure ample revenue to the 
 State, a license tax, moderate in auKJunt, may be imposed upon certain 
 classes of business to be paid to the State. 
 
 "5. That it shall be left to each county to determine, by its local 
 Legislature, whether it will tax, for its local purposes, other descriptions 
 of personal jiroperty. 
 
 " 6. That real estate be relieved entirely from taxation for State pur- 
 poses. 
 
 " 7. That the real estate of corporations shall continue to be taxed 
 where situated, as under present laws. 
 
 '■ The first proposition herein stated is leased upon the fact tliat cor- 
 porations are the creatures of the State, and are especially accountable 
 to the State. The citizen, in his individuality, is older than the State, 
 and in some aspects higher than the State, but corporations are neitlier, 
 and are utterly subordinate and responsible to the State. Tlie system 
 proposed insures uniformity, both in the method of assessment and the 
 rate of taxation upon the classes into which corporations may be divided. 
 The effect would be to subject to taxation, light though it may be, hun- 
 dreds of millions of property whicli cannot be reached by jjrescnt laws. 
 
 " The second proposition is designed to avoid complications as to 
 investments in non-taxable securities, such as Government bonds. 
 
 " The object of the third proposition is obvious. It is to make tax- 
 ation light upon organizations, the ])urpose of which is to enable several 
 men of limited means to form a corporation to do wluit one man of 
 large means may and does do. It is in the interest of the poor man and 
 favors the co-operative organizations of that class. 
 
 " The fourth proposition is conditional. I do not approve the prin- 
 ciple, yet it may be expedient. So urgent, however, is tlie need of im- 
 mediate reform in our tax laws, that I would even concur in what I might 
 not approve. 
 
 " Of the fifth proposition it may be said that, novel as the plan may 
 seem, it has precedents in the legislation of the State. Tliere is some 
 personal property which the law now makes taxable in one county and 
 exempt in another county. It is a valuable suggestion in the report of 
 the State xlssessors tliat, on certain conditions, mortgages should be 
 exempt from taxation in New York City. Those conditions may not be 
 admissible, but the principle involved in this fifth proposition is practi- 
 cally indorsed by that suggestion. The plan proposed recognizes the 
 doctrine of what is called 'local option,' and applies it to taxation of 
 certain property. The effect would be that the farmers of the interior, 
 
48 
 
 while i-elieved from tlie State tax ui>on theii* lands, migbo, if they choose, 
 have substantially the same basis of personal pi-operty upon which to 
 distribute their local taxes, this basis being diminished only by such 
 property as the State may take for the purpose of its own taxation, very 
 little of which, it is represented, is to be found in the strictly rural 
 sections. 
 
 " Of the sixth proposition little need be said. It confers a boon upon 
 the landed interest which that interest should be quick to appreciate. 
 Tlie present laws for assessing real estate would work well enough when 
 the incentive to irregularity is removed, as is proposed, by the lifting of 
 the States tax from such property. 
 
 " The seventh proposition explains itself. 
 
 " To formulate tliese suggestions into an effective and practical law 
 would be a serious task and call for the exercise of the highest wisdom 
 and the most enduring patience. But something must be done. Look 
 at the growth of the State in fifty years ; at the changes in the methods 
 of business and in the habits of the 2)eople ; at the creation of property 
 in new forms ; at the devices in other States, the effect of which is to 
 sap the resources of this ; and at the progress made toward reform in 
 taxation in adjacent States. 
 
 " Then look at the miserable patches affixed from time to time upon 
 the system which was but indifferently adapted to the requirements of 
 the State fifty years ago, and say if it is not high time for the State of 
 New York to reform her tax laws; to make them equitable, efficient, and 
 productive; to cease complaining about evasions which the law now 
 provokes and favors ; to let go of that which you cannot hold, and to 
 hold that you may hold, but do not, owing to the defects of your laws. 
 
 ' ' The germ of the system proposed was presented in the able re})orl 
 of Mr. David A. Wells, and Mr. Isaac Sherman has since pressed for 
 reform in taxation in a like general direction with singular ability. But 
 it needs that a legislator endowed with high courage and rare patience 
 shall devote himself to the work of reform. Not patching, but entire 
 reconstruction is needed. The hope of obtaining satisfactory results from 
 the present broken, shattered, leaky laws, is as vain as it would be to ex- 
 pect highly useful returns from the toil of one who 
 
 ' Is dropping buckets into empty wells, 
 And growing old in drawing nothing up.' 
 
 " No other State has such resources for taxation, and no other has 
 
 suffered its resources to run so uterly to waste for want of judicious 
 
 legislation." 
 
 GEO. H. ANDREWS. 
 
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