New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-01-19
BANK D0DGES TAXES.
CITY ROBBED, SAYS METZ.
Controller Orders Investigation OF
old Custom House Purchase.


purchase of the old Custom House, through
which the city has been deprived. since 1899 Of
taxes in the sum of about 100000.
Il am determined. if possible said the Con-
troller yesterday, Ito compel the National City
Bank people to pay taxes on a property which
manifestly is theirs, and from which they re-
ceived rental from the government. l under
stand that the Law Department six years ago
decided that this parcel exempt from
taxes; but IT IS remarkable and suggestive that
there should continue arrangement through
which the city loses more than half a million
dollars in taxes on property which is being
rented by the government from the National
City Bank
Il don't know whether we can do anything
about it or not said President O'Donnel of the
Tax Department. yesterday 1T is the most
fragrant case of lodging taxes that has ever
come to my attention, and If there is any way
to make the property pay taxes, like other prop
erty in Wall-st.. we going to find the way
to bring it about"
partial investigation of the case yesterday
by Controller Metz who has ordered experts In
the Finance Department to make special re-
port on the transaction, shows that by the end
of the next two years which marks the ternina-
tion Of the contract between the bank and the
government, the bank will come into possession
of piece of real estate square in extent
in the heart of the financial district. worth about
$6OOOOO0 for which It has not been COM
PEELED to pay anything in cash The bank
agreed to pay the government for the old Gus
tom House the sum of So, 100000, and got it at
that figure, Since the original transfer the prop
erty has enhanced in value. till 1t now is worth
nearly double what it cost the bank.
SECRETARY GAGE MADE CONTRACT.
Lyman J. Gage, Secretary of the Treasury.
T-,s+1 lFo-4
and Trust Company. closely affiliated with the
National City Bank, conducted the negotiations
which resulted in the sale of the Custom House
TO the bank. The bank never took technical title
to the property. although its practical owner
ship is demonstrated by the fact that the gov
ernment pays the bank an annual rental of
S180,60O Since the negotiation of the contract
by Mr.. Gage and the bank people. the govern
n7ent has paid in rentals, including this years
rental. the approximately of S914,0O0. In
the same period the city has been deprived OF
taxes on the parcel to the ex,ent of about
100000.
Last February the Custom House sale trans
action matter came up in the House when the
Sundry Civil Appropriation bill was on passage.
Representative Sulzer, of this city, and John
Sharp Williams, the Democratic floor leader,
led the fight against allowing the item for the
annual payment Of the rent for the Custom
House to go into the appropria ton bill Mr..
Sherman was in the chair. Mr. Hemenway in
charge of the bill, said that he would not under
take to defend the contract but said that it was
a contract, nevertheless The item elm
mated from the bill Controller Metz has been
informed that two years rental will be included
in the Sundry Civil Appropriation bill this year.
He has decided to ask Mayor Mcclellan TO
oppose the passage of the bill with the item IN
IT until the bank people consent to pay taxes on
the property.
DEPOSITORY FOR GOVERNMENT BONDS.
Controller Metz's assistants yesterday said
that in the last eight years the National City
Bank had received in interest on government
bonds deposited with it the Of 100000, ap-
proximately. By the end Of the contract period
in 1909. these experts say, the bank. through
the kindness of the Treasury Department. will
have saved the sum. including interest rent and
taxes approximate tely. of So $4,000 while it paid
for the old Custom House $32650O0 thus leav-
ing the bank a profit OF $4,000 and title to the
plot worth about S6,000,G0O-
Since the contract was entered into the Ma
tional City Bank has been a large depository
for government funds. Mr., Metz says. the de-
posits aggregating from $10000000 TO S25,O0O,-
GOO and az the same time the bank has been
the clearing bank for the city OF New-York,
holding an average deposit of city funds to the
amount approximately, of S10OOOOOO
The sale of the Custom House was authorized
bv act of Congress, approved on March q 1899
which authorized the Secretary of the Treasury
to sell the plot for not less than sS,0O00Oo'
Quickly following this the local Tax Department
nut the plot on the rolls with assessment
of 81 500 OOO this being about SIS per cent OF
its market value. The bank people at once in
formed the tax officials that the parcel was
exanon+ and that the consolidation act expressly
stimulated that the block bounded by Wall. Will
tam and Hanover SITS and Exchange Place
should he exempt. Commissioners Feltner Pat
terson and Sheehy. after consulting with the
Law Department, signed a report saying that
the property exempt
This decision never pleased the real estate eX-
merits in the Tax Office Controller Metz now is
determined to take up the fight to compel the
hank to pay taxes and the parcel will be put
on the rolls next year along with this years
+axes one years assessment be included
in next years levy omitted assessment
BILL TO AMEND CHARTER LIKELY.
Meanwhile there is strong probability that
a bill will be sent TO Albany amending the char
+ar with reference TO the exemption of the Gus
tom House site
In the debate in the House a year ago 1t was
charged that the bank never paid any money
outright for the Custom House. 1t was said
that President Stillman Informed Secretary
Gage that he had credited the government with
the amount of the purchase price of the parcel
less $50 900, which sum represented the govern
ment's ownership.
On this years assessment rolls the old Gus
tom House property is assessed at $4,000, ooo Of
which 81 100 900 is for the land The plot is 1877
feet inches one way by III feet s inches the
T'bara has been a marked rise in land