New-York tribune., 1911-11-23
Prof. John Bates Clark, Of Columbia,
Discusses Proposed Reduction in Rate.

Pr0f. J0nn Bates Clark, oi Ooiuni"i"'
Discusses Proposed Reduction in Rate.
J To the Editor of The Tribune.
Sir: circular from the congestion
commission" describes two bills, one OF
which seems TO have the support OF very
impressive list of organizations. 1t is
bill to reduce by a half the rate OF tax
alton on buildings in New York. AS thls
city Is not in such a position that 1t can
stand q large reduction Of It's Income, the
proposition, Of course, amounts to making
large increase in the tax on land. III IS
apparently indorsed by the Federation OF
Churches, the City Club the Peoples lnstl-
tute, the Neighborhoood Workers Associ-
alton. the Brooklyn Central Labor Union,
the Tenants Union, the Church Association
| for the Advancement OF the Interests OF
| Labor the Citizens Union. the Womens
Trade Union League. the Central Federated
Union, the New York City League OF Saw
ings and Loan Associations. the United
| Hebrews Trades, the Peoples Forum, the
East ,Flatbush Taxpayers Association and
the wyckofr Heights Taxpayers Associ-
alton.
! Possibly II the great increase in the tax
alton on land had been placed conspicuously
| IN the foreground, instead Of a decrease IN
the tax on buildings. it might have been
/ less easy to secure unqualified Endorsements
OF this measure IL Is In effect, conflsca-
| ton Of a considerable part Of the value or
| land without any corresponding addition
to the value of buildings. The value OF an
artificial product corresponds I'm general
way with the cost Of making It, and
| building that can be erected for $4,000
cannot, for any appreciable time, be made
worth more than that amount by reducing
/ the tax on II. The loss OF value OF the
land itself rests permanently upon the
owner II the actual amount OF confiscation
which the proposed measure involves were
carefully figured II would astonish any one
who thinks lightly Of It and accepts the
| proposed measure for what, on It's face. 1t
claims to be able to accomplish.
| Would this conhscation justify itself NOR
ally by its results? Is It right to seize part
of the land value, because Of a benefit that,
as is alleged would come to the occupants
OF buildings? II large class of persons
needs relief is It Just policy TO afford II
at the cost OF another class, instead Of at
the cost Of the community at large? As a
i
answer this in the negative.
But would the relief come? Would build
inss multiply and rents be lowered? That
question is extremely debatable. The ma
1ority Of buildings are owned by the same
persons who own the land they stand on
and are built with a full knowledge Of the
fact that the structures will gradually lose
value until they are worth nothing at all.
The land will gain value, and this gain will
constitute a sinking fund to offset the de-
preciati ton OF the building Whatever re-
duces this sinking fund makes IL necessary
to have a larger return from the building
itself II the entire investment shall con-
tinue to attract capital as II does at the
present II this mode OF using funds be-
comes less attractive II will not be easy 10
secure a proper supply OF buildings The
probability is large that much or all of the
tax taken off from the buildings Will be
needed as a sinking fund against the time
when they will have to be replaced, since
what has heretofore served as such sink
ing fund will i'm considerable part have dis
appeared. If that Is the case tenants will
get little or no benefit from the measure.
The probability is great that II any result
In the way Of increased building comes by
the adoption of such a plan 1t will be very
disappointing In amount. In erecting build
lngs for the return which they can get
from them men will face the fact that the
rise in the value Of the land will no longer
yield the same offset for the decline In the
value OF buildings as it is now yielding.
The largest consideration in the case Is
the myriad OF home owners who yearly
leave the crowded districts and establish
themselves in the outlying parts OF the city
They relieve the congestion In the most
benefcent possible way Those who go ex-
perience a Transforming Of their lives and
those who stay are the better for the re-
duced congestion which the movement tow
ard the suburbs insures The attractions
Of a home owned IN fee simple constitute
part of the lure that draws families from
the crowded centres. but another part of
IT is the fact that a home so secured gains
value the years pass and bids fair 10
constitute a comfortable little property
which can be handed down to heirs. What
ever reduces this attraction puts a check on
this most beneficent of movements, and
there IS no doubt that a great Increase in
the land tax would have this effect These
buildings, like others, depreciate in value
and the Offset for this loss IS the appreci-
alton OF the land with less of this in
crease IN the land value there IS less pros
pect of making a comfortable provision for
ones family. Nothing could be less likely
to improve the average condition OF the
working population than TO check this move
ment 60 the suburbs These things and
many others need to be weighed in the
balance before a measure that would try
to relieve the crowded districts by partly
confscating land shall be adopted.
JOHN BATES CLARK.
New York Nov. Il, 1911.