Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-05-17
More Than $174,0OO,0O0
Left Unpaid From Total
of $274,OO0,0 600.
CERMAK CALLS BANKERS
TO HELP SOLVE PROBLEM
Situation Has Grown Out Of County
Assessment of 1927, De.
clared Illegal.
BY JOHN F. SINCLAIR.

Chicago is up against the most serious
crisis in her picturesque career. The
people have revolted en- masse against
paying their taxes.
This tax strike" is no minor affair
either. 1t is not being evaded by few
inconsequential persons, but by hun
dreds of thousands Of respected citi-
zens. 1t is social and financial revolu-
tion-nothing less.
May Is was the last day" to pay
1929 taxes in Chicago without penalty
The amount levied was S274 1000 900.
The citizens paid less than S100, 900 ,000
Think of it! More than S174,000, 900
In tax deliquencies in one years as
Sessmenti
without Precedent.
This has never happened before in
any large American city. Her business
men are alarmed. People are going
about saying very little, but keeping the
money due on their taxes-if they have
any-in their pockets.
One cannot see how the situation
could be worse. It Is a complete mess,
and every citizen Is vitality interested
in the question OF how Chicago is to
work it out.
But that's not the whole story. It is
not even half of It. To understand It.
one must go back and get the back
ground. Cook County. of which Chicago
Is the center. assesses property for tax
purposes every four years. 1t did so
in 1927.
Then the Illinois Supreme Court de-
clared the assessment illegal upon the
ground of fraud. The State Tax Com
mission took ID months to levy new
assessment. so that no taxes at all
were paid in 1929 in Cook County.
S5O,OOO,OOO Stin Unpaid.
But on June 10, 1890, the 1928 taxes
were made due, with the delinquency
date September IS. The total tax
levied for Cook County was $219, 900 600.
OF that amount over $50, ZOO, 900 is
still unpaid, in spite Of the fact that
10000 parcels of real estate were sold
for taxes and $4,000 parcels Of land
were put up on which no bid was re-
ceived.
There were $4,000 individual parcels
of land subject to tax forfeiture. All
this happened in the days before the
stock market crash.
The 1929 taxes, amounting to $274,-
100000, were due last Friday, and less
than 40 per cent were paid. The 1880
assessment, which has been set at $284,-
100000. is due on December 81, next,
but not thing has been done about
its collection.
In a word, Chicago's tax bills for
1891 amount to over s55o.o0o, 900. As
things stand today, the city will be
lucky to get $150,00o,00o out Of it.
Sold Tax Warrants
But Cook County, which Is really
Chicago, must have money to carry on.
Up to this time it has had money, even
though taxes were not paid
How did they do It? Simply by sell
ing tax warrants to banks and investors
up to the amount of the taxes levied
or nearly so. That is to say, that even
though only $100,000,000 of the 1929
tax has been paid in as taxes, the city
has already received the $274,000,000
which was due.
She has spent it all, and she is now
spending the 1880 money, which she re-
ceived from tax warrants put out In
anticipation of the 1880 taxes.
Who own these tax warrants? Largely
the banks Of Chicago, which have taken
them as the only way to meet the
problem facing the city.
If the city of Chicago-or rather
Cook County-is able to collect only
one-fourth or one-f1fth of the amount
due this year, the warrants outstanding
will have to be carried by the banks
until such time as the money from
taxes, or from some other source, be-
comes available.
Expect Crisis Soon.
And that's the rub now. The taxes
are not coming in. The banks cannot
go on indefinitely piling UP more non
liquid securities Of this character in
their assets. They know 1t. The citi-
zens know 1t, and every one expects
the crisis will be reached in the next
few weeks. if not before.
The bankers of Chicago have been
asked by Mayor Cernlak to consider
the crisis and to see what should and
can be done about 1t. They are to
meet Monday afternoon.
II the banks refuse to buy any more
warrants In view of the tax strike, then
the city and county government will
break down. For salaries, to carry on
will not be forthcoming. This includes
schools and all forms of governmental
activity, such a-s police, fire, sanitary
board, waterworkS, etc
John M. Pratt, executive director Of
the Association of Real Estate Tax
payers, who is advising the taxpayers of
Chicago not to pay their 1929 tax upon
the ground that it is illegal, says that
1.-The 1929 tax on the basis of the pres
ent assessment will never be collected"
Mr.. Pratt contends that it is not only
unfair and illegal, but actually con-
hscatory.
Says Tax Must Be Paid.
Silas H. Strawn, recently elected
president of the United States Chamber
of Commerce, who was chairman of the
Citizens Committee, which provided
the funds last year to carry on, when
asked for his opinion as to how the
crisis is to be met, said:
THE assessments for 1929 and 1890
must and will stand. The taxes LEVIED
must and will be paid. There Is no
alternative. 1t is perfect madness to
think otherwise"
Roughly, the lines are drawn between
two distinct groups-the real estate
owners, led by John M Pratt and many
large real estate taxpayers, on the one
hand, and Silas H. Strawn, Melvin A.
Traylor, president of the First National
Bank, and their associates, representing
the banking groups, and the larger
business interests of the city. ON the
other.
What the final outcome will be no
one can predict, but that Chicago Is
now face-to-face with the greatest
strike in her entire history-the tax
It'll