XXXVIII.

WHEN Governor Tilden came into office in 1875, fully one half of the population of the State resided in cities and incorporated villages; and the debt of these corporations amounted to seventy-five dollars for each inhabitant, and the tax imposed upon their real estate was equivalent to fully one third, and in some instances reached to one half of the income from it. The sums thus levied upon the municipal corporations of the State, embracing some two and a half millions of inhabitants, were nearly or quite equal to the total burden of taxation borne by the entire population of the United States of twenty-five millions only twenty years before. The abuses of which these figures are only an imperfect expression had resulted in part from the neglect of the Legislature to discharge the duty imposed upon it by the Constitution of 1846 properly to restrict municipal corporations in their powers of "taxation, of assessment, of borrowing money, of contracting debts, and of loaning their credit," and in part from the as yet unascertained boundaries which separate the provinces of local and State governments. The familiarity with these abuses which Mr. Tilden had acquired in his four years' war with what was commonly known as the Tweed Ring, made him feel that it was one of his first duties to see that the Legislature executed the commands of the Constitution and imposed the restrictions upon. municipal corporations contemplated by the Ninth Section of the Eighth Article of that instrument; for to its neglect of these commands was largely due the fact that the debt of New York city, which was less than fourteen millions in 1846, had already swollen to the enormous sum of one hundred and twenty millions over and above its sinking fund.

The questions involved, however, were very complicated, and required more study and deliberation than the members of the Legislature, with their other labors, could well devote to them. Governor Tilden therefore recommended the Legislature to create a commission which should "report to the next Legislature the forms of such laws or constitutional amendments as were required." His motives for this recommendation are set forth at length in the following Message.

MUNICIPAL REFORM MESSAGE.

To the Legislature.

EXECUTIVE CHAMBER, ALBANY, May 11, 1875.

THE Constitution (Article VIII. Section 9) declares that "It shall be the duty of the Legislature to provide for the organization of cities and incorporated villages, and to restrict their powers of taxation, assessment, borrowing money, contracting debts, and loaning their credit, so as to prevent abuses in assessments and in contracting debt by such municipal corporations."

The Convention of 1846, having exhausted its sessions in the consideration of questions upon which it acted, and finding itself unable to deal adequately with the problem of municipal government, on the day before its adjournment charged that duty upon the Legislature. Its primary object was to protect taxpayers in the municipalities against abuses on the part of local governing officials, in taxation for local administration, in assessments for local improvements, in the contraction of municipal debts, and in the loaning of municipal credit.

Those evils had already attracted attention, though they were at that time but in the beginning of the monstrous growth to which they have now attained. In the twenty-nine years which have elapsed, the increase of population in this State has been chiefly in the cities and incorporated villages, until, at the census of 1870, those organizations embraced more than two millions, and now about two millions and four hundred thousand of our people. The course of legislation, so far from obeying the injunction of the Constitution, has been mainly in the opposite direction.

Every annual statute book has been largely occupied with enactments favoring the growth of municipal expenditure, involving taxation, assessments, the contraction of debt, and the loaning of credit. The result, so far as the cities of the State are concerned, is shown by an abstract of reports from the twenty-four cities which have been furnished to me by the local officials, and which I herewith transmit to your honorable body.1

The aggregate valuation of property in these cities subject to taxation in 1874 was $1,569,535,074.

The aggregate of city taxation was $36,439,121.

The aggregate of county and State taxation was $13,990,487. The aggregate of taxation was $50,429,609.

The aggregate debt of these cities was $175,657,267.

Computing the taxation and debt on the population of 1870, adding 20 per cent for subsequent growth, the city taxation was $15.57, the county and State taxation $5.98, and the aggregate was $21.55 for each inhabitant. The city debt was for each inhabitant $75.80.

It must be borne in mind that the proportion of the assessed valuation of real estate to its actual value is fixed in these reports according to a standard from which there is now a large reduction. The average of the assessment is 55.43 per cent of the true value. If the recent fall in marketable values be estimated at one third, the rate of the assessed valuation would be 80 per cent of the actual value. It may be presumed that the values stated in these reports have reference to real property. No allowance is made for the under-valuation of personal property. It is probable that in many instances the taxation imposed upon property in cities has been from one quarter to one third, and by the decline of rents is now one third, and sometimes reaches one half the income of real estate. In 1853, when the population of the United States numbered twenty-five millions, the whole cost of its government was under fifty-five millions of dollars. It will be seen that less

1 See tables on pp. 136, 137.

than two millions and a half of inhabitants of the cities of New York pay nearly as much taxation as was imposed on twentyfive millions about twenty years ago, for the cost of the army, navy, Indian treaties, and all other expenses of the General Government.

As I remarked in my Annual Message, "in the decade beginning July 1, 1865, the people will have paid in taxes, computed in currency, seven thousand millions of dollars. Three fifths were for the use of the Federal Government, and two fifths for the State and municipal governments. It is doubtless true that some portions of the municipal expenditures were for objects not strictly governmental; but it cannot be questioned that much too large a portion of the whole net earnings of industry and of the whole net income of society is taken for the purpose of carrying on government in this country. The burden could more easily be borne when values were high and were ascending. As they recede toward their former level, the taxes consume a larger quantity of the products which have to be sold in order to pay them. They weigh with a constantly increasing severity upon all business and upon all classes. They shrivel up more and more the earnings of labor. This condition of things ought to admonish us, in our respective spheres, to be as abstinent as possible in appropriations for public expenditures. If the cost of government in our country were reduced, as it ought to be, one third, it would still be larger than a few years ago, taking account of the prices of the products which, in order to pay that cost, we are compelled to convert into money."

Consequences.

The burdens upon taxpayers in cities are exhibited in various ways. Bills for relief by the temporary funding of floating debts; bills authorizing loans to carry on or complete permanent improvements; frequent appeals from taxpayers against the measures of local officials, so numerous that it is quite impossible to arbitrate intelligently between the contending parties, are among the incidents of the times.

The choice between the opposite evils which such cases pre