Evening star., 1940-05-12
New York's La Guardia Averts
City's Threatened Bankruptcy
Land Assessments Limit Projects Even With
Federal Subsidy; Credit, However, Is
Good, Controller Points Out
By Marquis ". Childs.

NEW YORK.-very shortly this great
est city in the worlds history will know
whether 1t is gaining or losing popula-
ton, whether it is still growing or
whether finally its meteoric rise has
been checked. Ofhcials expect to an
nounce preliminary figures for the 1910
census within few days.
On that total the course of real estate
values In this vast human hive may
very well depend. And in turn the polit-
1cal future Of the five boroughs and
their present overlords may be more
closely related to the outcome Of the
census than any one has realized. For
New York City as going concern must
tax property to pay for increasingly
costly services and to sustain a debt
structure as towering and improbable as
the Empire State Building.
If property values are forced down,
then tax returns decline and it becomes
difhcult, perhaps impossible, to find the
$160.000,000 which is the item OF interest
on the citys debt But as long as land
values are up where they are now, 1t is
impossible to solve the low-cost housing
problem and rehabilitate blighted areas
1t is vicious circle without an apparent
break and only the Herculean labors of
little man named La Guardia have
averted, for the moment, at any rate a
kind Of bankruptcy.
Through the 20s and into the 30s the
metropolis was on colossal bender.
While real estate and other spectators
were buying and selling the blue sky, the
city administration was giving away
everything that was not nailed down.
Mayor La Guardia has had the troubled
task Of guiding this confirmed alcoholic
back to comparative sobriety while try
ing at the same time to make up for
years Of neglect of the city's capital In
vestment.
Problem of Every Large City.
The problem OF New York is not Of
course, a unique problem. 1t is the prob
lem every large city faced, it now ap-
pears, with a longtime trend toward
decentralization and decline; the lqui-
dation of an era of furious, haphazard
growth. Here in New York, because Of
the very bigness of the city. the dilemma
Is thousand times magnified.
The assessed valuation of property in
New York is 100 per cent of the actual
valuation. Despite the improvement in
business since 1888, this assessed valua-
ton is for most real estate considerably
higher than any sale price that could
possibly be realized. How great this dis
crepancy may be for the total valuation
of the entire city it would be impossible
to say. But certainly it is clear that the
debt structure of $2,651 ,058 951-more
than twice the public debt of the United
States before the World War-rests in
part on values that are hopeful rather
than realistic.
The catch lies in the constitutional re-
quirement that the debt may not exceed
10 per cent of the assessed valuation AS
of January /, 1910, the city had margin
under that limit of only $29 ,907 ,567. For
city government with current expense
budget Of more than $500, 900 900, this is
slim margin indeed.
While Mayor La Guardia has added
close to $3.50 200, 900 to the debt he in
herited when he took Office in 1894
part Of this went for revenue producing
projects which pay their own way. A
considerable portion went for projects
on which the Federal Government Of
fered matching funds-parks, play
grounds, schools, new streets and sewers
capital investment to make up for
years of neglect under Tammany.
Better OF Financially.
In any event the net increase In the
debt is not SO important as the steps
taken to put the city on the road toward
solvency, says red-headed Controller
Joseph McGoldrick, who is match in
size and rotundity for La Guardia, his
political sponsor. Mr.. McGoldrick can
quote chapter and verse to support his
claim that New York is better off finan-
cially today than in many years. He
points to the fact that tax delinquencies
are now less than 10 per cent, whereas
in 1888 they were more than Is per cent.
More important, he says, the total as
' sessed valuation of all real estate has
been brought down from 10 billions in
1888 to 16 billions under La Guardia.
This does not mean that the total tax
bill has been reduced in proportion, since
the La Guardia administration has in
creased the rate from $2.33 q hundred
In 1888 to $282 in 1910. It does mean
that persons holding old and deteriorated
property have received some relief.
In 1882 and 1888 the city was actually
bankrupt, although the creditors-that