The New York herald., 1879-11-25
Fearful Financial Condition Requiring Care
Caution, Courage and Economy.
FORTY-TWO MILLIONS OF DOLLARS In DEBT
What viii Happen Unless Strong Hand
Uses the Knife.
THE BRIDGE To BE FREE WITH A "BUT."

or curious fnanciers and clear-headeu puDlicistss
That sooner or lator bankruptcy. union with New
York q miracle must como to her relief has long
been believed At present the condition of our Sis
ter city is most priable and that of her property
holders and taxpayers is more touching. Vague
rumors Of impending bankruptcy and inexplicit
charges of items omitted from the tax levy have
been current for some weeks. and. for the purpose
of ascertainng reliable data in the promises. the
editor Of the Brooklyn Eagle was sought as one most
likely to know the inner facts. MIR. Thomas Kin
sella represents the largest property holders in
Kings county and has held such confidential rela-
tions with officials and taxpayers as enable him to
speak er cattedra with uncertain sound 1t will
be found that the alarmists have ample ground on
which to base their apprehensions. and it would be
Impossible to exaggerate the mportanco signid-
sance of the following expose. Mr.. Kinsella
found in his Office hard at work. but willing in the
interest of the city to make clean breast of very
discouragine state of things. In answer to ques-
ton put for the HERALD. he said. eyes, there is
danger, and again there Is not, in the present
condition of Brooklyn's financial affairs
There is danger in the constantly increas-
ing tax arrearages and In the amount OF tenn
porary bonds the city has been endeavorng to carry
Tor many years. The danger be averted If Brook
lyn will make resolute effort to enforce the
payment of taxes in and to close up the local
Improvement accounts for which these temporary
bonds issued The financial situation is such
as will require care. courage and economy
to get down to hard pan and to put the
finances of the city in permanently
satisfactory shape. Above all things the action
quired must not be delayed. and il your visit is
indication that the HERALD is going to give its
help in this direction l am glad to see you. and
will cheerfully give any information in my pos
session."
HOME FACTS.
'what is the amount Of taxes in arrears? How
did this account come to be element of danger
and what is the especial danger feared?"
''The amount of taxes in is, should judge
between three millions and half and four millions
have not the official figures at hand Those give
you accurate enough for your present purpose.
Tho city having of course. capital to start with
must make good in some way the taxes it fails to
collect. The money is borrowed "tax certif-
Gates OF Indebtedness and Of such certif-
Gates there now outstanding shout the
amount have stated. This indebtedness is not
decreasing. If it should go increasing the credit
OF tho city would be impaired. we might be unable
to borrow any more money. and this would bring us
to q standstll. You ask how did this indebtedness
come to be SO large as to be source OF danger.
There is more than one cause for it, The depression
which followed tho panic of 1873 left very many
was not possible for carrying large amount
of real estate to sell part of it to keep what
they held clear of encumbrances except at ruinous
sacrifice. The more unproductive real estate man
owned the poo he seemed to be during the years
when real estate was drug upon the market. Even
the owners of productive real estate found their in
comes suddenly reduced by the decline in rents and
I suppose these people experienced the usual Diff
Guilty men have in reducing their style Of living SO
to meet decreasing income The large real
estate owners. who naturally have most influence
In local affairs. having suffered their taxes
to remain in arrears then devised plan
for securing relief through legislative Interference
the prolific source of trouble to Brooklyn. Up to
this time one per cent month default was charged
upon taxes in bill prepared uAder
which oil taxpayers in to the city given
the right pay such taxes with the simple addition
of seven per cent interest from the date the taxes
Secame due. The advocates OF this bill argued that
II passed those who in debt to the City would
make haste to take advantage of the law. The city,
1t said. would be ablo to collect nearly all the
taxes outstanding end with per cent interest
and so the city would be made whole for 1t never
had to pay more than seven per cent for the money
1t had to borrow. Why, it was asked, should the
city be 60 unreasonable as to exact twelve per
cent from OF property within its limits when
six or even five per cent interest? In order show
that all that was asked was opportunity of pay
ing tho back taxes at tho legal rate of interest the
,xpired by its own terms within one year. This
Argument was Mt least plausible. and 1t prevailed
with the Legislature. The law augmented the OWLS
1t was perhaps intended to remedy. The taxpayers
In arrears did not rush to the tax Office pay up.
On the contrary. builders and others, who would
gladly borrow money ut seven per cent interest,
used the money they owed tho city for their
business since the city virtually loaned them money
on as favorable terms as tho banks would The law
created still greater evil When the Legislature
intereres ut all between the city and its debtors
continued and enlarged Interference is hoped for
and doubtless many taxpayers. i'll the hope OF tur-
ther relief. held back. At the most the money they
retained in their hands worth per in
terest to them. aud this all the city charged for
It, The law Jailed in it's purpose, and, was an-
tcipated by those who opposed it, among whom was
MIR. Schroeder. then Mayor. When it was about to
expire by its terms more influence than before
brought to bear to have the law rc-enactcd tor
passage OF The law for ono year doubled the difficulty
and its reenactment increased IL manifold. The law
suffered to lapse but then tho situation had got
tn be that tho local authorities found greater
difficulty than in enforcing it, To sum up the
payment of has not been enforced in brooklyn
by tho sale o property which the taxes are lions
for Ave six years past. and tho result s there
now nearly four millions of taxes in in this
city no sale of property in arrears for taxes has
~ yet been provided for. Or COURSE the difficulty
OF making sales increases with the quantity OF prop
erty liable to be sold Tor nonpaymcnt of taxes."
HAS the Legislature created other dinicuities?
OTHER LEGISLATIVE EMDARRAsssiEyTs.
eyes. IL has. The old rule of default TOR non-pay-
year. The Legislature reduced it to nine per cent.
Property liable to be sold tor non-payment of
Is not, as you know, sold outright. IL Is sold to
whomsoever viii pay the city's claims upon it and
take possession OF the property for the shortest
term OF years subject to the right redemption by
Its owner. Ihe business OF buying such property
is more or less risky. is troublesome and pornaps
TO an extent odious. We found from experience
that hftcen per cent default TO tho purchaser such
propcrty--when its owner chose to redeem twas
NO more than sufficient to induce people to engage
IN the business of purchasing property at our tax
lve ueyscp pnt bv tic
Legislature and the city Obliged to buy in prop
erty when nobody else would. Tho result was that
III the irst tax sale under tho twelve per cent law
no private purchaser appeared. and no. In effect, no
sales were made and not penny was received by
the city. On the contrary. IL had to bear the cost
Of the advertisement, which was quite item In
the aggregate. The advertising presents another
diihcuity. When not more than 600 or 800 parcels
pt property were offered for SALE ana when pur-
chascrs to DO found, the advertising cost tho
city nothirg IL was charge against the delinqucnt
VINO sought to pay up before tho day cf sale, as hc
nilcn did nInlnst the nurcnnser. lint Wlali