/TD 
 
 225 
 
 N5A5I 
 
^ 
 
 
 i^ 
 DOCUMENT No. 58. 
 
 BOARD OF ALBUMEN, 
 
 DECEMBER ,07, 184?. ' ^ 
 
 JK ai 
 
 REPORT 
 
 OF THE 
 
 CROTON AQUEDUCT BOARD, 
 
 IN RELATION TO 
 
 THE WAYS AND MEANS OF PAYING THE 
 
 CROTON WATER DEBT. 
 
 
 N E W - Y O R K : 
 
 CHAS. KING, Printer to the Board of Aldermen. 
 
 1842. 
 
 

Ml 
 
 DOCUMENT No. 58. 
 
 
 BOARD OF ALDERMEN, 
 
 DECEMBER 27, 1842. 
 
 REPORT OF THE CROTON AQUEDUCT BOARD, 
 
 In answer to the Resolutions of the Boards of Aldermen 
 and Assistant Aldermen, in relation to the Ways and 
 Means of paying the Croton Water Debt. 
 
 Laid on the table, and double the usual number ordered to be printed, 
 
 JOS. R. TAYLOR, CLERK. 
 
 The Croton Aqueduct Board of the city of New- York, to 
 whom were referred the resolutions introduced into the 
 Board of Aldermen, and also the resolutions introduced into 
 the Board of Assistant Aldermen, in respect to Water taxes 
 by said resolutions proposed to be levied upon buildings and 
 
 M162822 
 
 
t? X- *' ^ * C " 1 * J| ** ** pec * 
 
 Doc. No. 58.] 542 
 
 the rents of buildings, and upon merchandize and all other 
 personal property, and upon the sales of all goods, ware s 
 and merchandize sold within the said city, and upon com- 
 missions arising from the negotiation and sale of foreign 
 exchange, and upon the cost of erection of all houses and 
 the building of ships or vessels, and upon all manufacturin g 
 and mechanical productions, and upon the salaries, fees, or 
 perquisites of professions (when amounting to seven hundred 
 dollars), copies of which resolutions are hereto subjoined, beg 
 leave respectfully to 
 
 REPORT : 
 
 That they have examined these resolutions, with a due 
 sense of the magnitude of the interests involved, presenting 
 for consideration the very important question, from what 
 resources, and within what time, the large debt of twelve 
 and a half millions incurred in constructing the Croton Aque- 
 duct is to be paid, what portion of those resources are pro- 
 perly applicable to the principal, and what portion to the in- 
 terest of the debt, what part of the burthen must be borne 
 by taxation, and upon what particular interests or species 
 of property, or branches of business, and in what proportions, 
 the burthen can best be laid. It need hardly be said, that 
 in the proper adjustment of such a question, the lasting wel- 
 fare of every person having any stake in the property or busi- 
 ness of the city is deeply concerned. 
 
 The cost of the Aqueduct already incurred, as ascertained 
 from the Comptroller's books, including every expense at- 
 tending the introduction of the Croton Water into the city, 
 is 811,896,775, including in that amount the sum of 
 81,580,290, which has been paid from the loans negociated, 
 for interest accruing up to the time of putting the work in 
 
543 [Doc. No. 58. 
 
 operation, and also including $647,157, being the discount 
 paid on the sale of the stocks. The further sum of 
 $200,000 will be required to complete the laying of the pipes 
 through the streets of the city ; and the additional sum of 
 $500,000 is supposed to be necessary to finish the bridge 
 over the Harlaem River, now temporarily crossed with iron 
 pipes. 
 
 Under successive laws of the Legislature, the city has 
 been authorized to issue stocks for twelve millions of dollars, 
 to defray the cost of the Aqueduct, under which permanent 
 loans have been made as follows : 
 
 At 7 per cent, interest, $120,305, redeemable May 1, 1847. 
 
 Do. do. 90,357 do. Feb. 1,1852. 
 
 Do. do. 799,850 do. Aug. 1, 1852. 
 
 Do. do. 989,488 do. May 1,1857. 
 
 At 5 per cent, interest, 3,000,000 do. May 1, 1858. 
 
 Do. do. 2,500,000 do. Jan. 1, 1860. 
 
 Do. do. 3,000,000 do. Nov. 1,1870. 
 
 Do. do. 190,000 do. Jan. 1, 1880. 
 
 Do. do. 120,500 do. Nov. 1, 1880. 
 
 $10,810,500 
 There is yet to be is- 
 sued, and probably 
 at 5 per cent $1,189,500 
 
 15 
 
 $12,000,000 
 
 On account of this balance of $1,189,500, the city treasury 
 has temporarily advanced $1,086,275, which has been ex- 
 pended for the work ; so that the sum now remaining unex- 
 pended of the twelve millions, and applicable to the exten- 
 
Doc. No. 58.] 544 
 
 sion of the pipes and completion of the Harlaem River 
 
 bridge, is but 8103,225 
 
 The amount required for those objects, as 
 above stated, will be $700,000 
 
 Leaving to be provided, in addition to the 
 twelve millions $596,775 
 
 It may therefore be estimated in round numbers that the 
 permanent Water Debt will be twelve and a half millions. 
 
 By the terms of the loans under which these stocks have 
 been issued, they are redeemable " on or after" the times 
 above indicated implying the mutual right of the 
 creditor to demand, and of the city to redeem, the stock, 
 either on or after those times. In the present examina- 
 tion, the Croton Aqueduct Board have therefore proceeded 
 on the basis, that the debt is to be extinguished by ac- 
 tual payment as it shall fall due. The character of the 
 city, and the due preservation of its fiscal credit, would at all 
 times forbid the idea of postponing the payment of any of 
 its debt after it should become payable. In the present 
 state of American credits, and amid the too frequent exam- 
 ples of neglected or violated public faith, by which the cha- 
 racter of our country is degraded, it is peculiarly the duty 
 of this commercial city to set the example of preparing at 
 once, and of declaring to the world that it is preparing, to 
 pay the debt promptly and punctually as soon as it shall be- 
 come redeemable. The public credit is the most precious 
 portion of the public property, and it can only be preserved 
 by preparing in season to perform our public engagements. 
 
 The resources applicable to the principal of the debt are 
 embraced in the Sinking Fund, which was established by the 
 
545 [Doc. No. 58. 
 
 law of the State, of June, 1812, and by several subsequent 
 enactments of the Common Council, under which certain 
 specified revenues, arising from markets, quit-rents, coach 
 and pawn-brokers' licenses, and other productive items, and 
 also the proceeds of a large amount of real estate, together 
 with the revenue to be derived from the Croton Water, are 
 especially set apart to accumulate as a fund for the redemp- 
 tion of the debt. These monies are invested, as received, 
 in purchasing the city stocks, and no portion of them has 
 ever been applied to the payment of interest on the city 
 debt. On the contrary, by the terms of the laws by which 
 the fund is established, it annually receives from the general 
 revenues of the city the interest on the stocks so purchased. 
 By this process the Fund has steadily accumulated, and 
 has now reached an amount equal, within a small fraction, 
 to the whole of the City Debt, not otherwise provided for, 
 exclusive of that incurred for the Croton Aqueduct, so that 
 the fund may now be regarded as exclusively applicable to 
 the extinction of the twelve and a half millions under ex- 
 amination. The annual receipts of this Fund are estimated, 
 in the last Annual Report of the City Comptroller, at 
 $230,305. It is believed that, excluding the proceeds of 
 sales of real estate, the annual amount may be assumed to 
 be 8180,000. 
 
 By the terms of the law establishing the Fund, the stocks 
 purchased are to be held by the Commissioners of the Sink- 
 ing Fund until the time fixed for their final redemption, and the 
 interest thereon is to be raised meanwhile by taxation. Con- 
 sidering, however, the amount of stock which has been 
 issued for the Water Loans, and the impolicy and hazard 
 of leaving outstanding and uncancelled, large amounts of 
 stock which are virtually redeemed, the Croton Aqueduct 
 Board would suggest the expediency of altering the law so far 
 
Doc. No. 58.] 546 
 
 as to direct the stocks purchased for the Sinking Fund to 
 be cancelled, whenever and as often as the amount here- 
 after accumulated shall reach the sum of one million of 
 dollars. In that case the amount to be collected in taxes 
 from our citizens, in any single year, to be applied di- 
 rectly to the Sinking Fund, on account of the Water Debt, 
 could never exceed fifty thousand dollars, being the interest, 
 on the million, while the burthen of annual taxation, whether 
 direct or indirect, would be relieved to the amount of fifty 
 thousand dollars, whenever and as often as a million 
 should be cancelled. The great object, then, to be kept 
 steadily in view, should be to expedite as rapidly as practica- 
 ble the operations of the Sinking Fund, and for that purpose 
 to render available all the resources fairly within our reach. 
 
 Among these resources, stands most prominent the large 
 amount of real estate now held by the city, and not 
 required for its public uses. It is true that a portion of 
 this property is productive, but to an amount far less than 
 the interest of the sum which it will command in cash. The 
 rents now amount to only 827,613 24, and even that amount 
 is liable to depredation from the officers employed to col- 
 lect it, as experience has unhappily shown. The princi- 
 pal, consisting mainly of valuable houses and lots in the 
 vicinity of Chatham and Pearl streets, with some available 
 property at Brooklyn, was valued in the last annual report 
 of the City Comptroller at $1,031,700. The present Comp- 
 troller, in a recent communication to this Board, values it 
 even in the present depressed state of prices at 8648,700. 
 In addition to this sum, there are the quit-rents reserved 
 from water lots heretofore sold by the city, and now yield- 
 ing a revenue of five per cent, upon a capital of 8342,000. 
 
 It is quite clear, that if this were the case of an individual 
 
547 [Doc. No. 58. 
 
 proprietor, his interest would be promoted by selling 
 these items of property, and applying the amount, as 
 far as it would go, to the extinction of the debt ; but still 
 more evidently would such a course be judicious, where 
 a government like that of this city is concerned. There 
 can be no good reason, why. the city government should 
 manage any real estate whatever, not wanted for its legitimate 
 public uses. The sale of all its superfluous property would 
 materially simplify the public business and accounts, dimin- 
 ish a patronage already too large, lessen the number of useless 
 officers, and save our citizens and the Treasury from the 
 dangers and demoralizing effects of embezzlement. 
 
 Another large and important branch of the public proper- 
 ty, which would seem under the circumstances to be fairly 
 applicable to the Public Debt, are the wharves and piers. 
 It may have been, and probably was, expedient for the pub- 
 lic treasury in the first instance to advance the cost of con- 
 structing these conveniences for our foreign and domestic 
 commerce ; but it can hardly be claimed that the city should 
 continue to maintain them, when it is notorious that they 
 can be better managed in the hands of individual owners. 
 The sums disbursed by the City Treasury upon these struc- 
 tures, during the sixteen years ending the 1st of January 
 last, amount to $1,121,472, whereas the total receipts from 
 this source during the same period, amount only to 
 81,050,715. The revenues are constantly absorbed in the 
 cost of repairs and of new wharves rendered necessary by 
 the increase of our commerce. It is believed that this proper- 
 ty could now be sold for at least a million of dollars. The ap- 
 plication of such a sum would very materially expedite the 
 operations of the Sinking Fund, and hasten the extinguish- 
 ment of the Public Debt. The opinion has been expressed 
 in some quarters, that instead of selling these wharves and 
 93 
 
Doc. No. 58.] 548 
 
 piers, a wharfage duty should be exacted from all merchan- 
 dize, packages, and commodities landed, and thus render this 
 branch of property tributary to the treasury. The objec- 
 tion to this measure will be obvious in the burthens it would 
 impose upon our trade, already struggling with many dis- 
 couragements ; in the difficulty which might be found in ob- 
 taining from the Legislature the necessary permission to 
 levy such a transit duty on the productions coming as well 
 from our own interior as elsewhere ; and in the well ground- 
 ed apprehension, that the nett revenues to be realized by the 
 Treasury would very inadequately compensate the city 
 for the risk of collection, and the burthen and inconve- 
 nience of withholding the whole of the principal from the 
 Sinking Fund. 
 
 A remaining resource, though not immediately available, 
 but which may eventually be applied to a large amount to 
 the reduction of the debt, is found in the great body of va- 
 cant lands belonging to the city, comprising several thou- 
 sand building lots, extending at intervals from 23d street to 
 93d street, some of which are nearly ready to be brought 
 into market for building purposes, and the residue will pro- 
 bably be required for that object by the time that the greater 
 portion of the debt will arrive at maturity. Opinions have 
 indeed been expressed that the proceeds of these lands 
 alone, if retained until the last portion of the debt is payable, 
 would defray the whole cost of the Aqueduct ; but such an 
 estimate can of course find no place in a financial calcu- 
 lation, except as a reason for suggesting, that as the value 
 of these lands is mostly prospective, and could not be real- 
 ized in the present depression of prices, they may be pru- 
 dently retained until the future developement of our trade, 
 and consequent extension of the city, shall render them more 
 available. The late Comptroller, in his last Annual Report, 
 
549 [Doc. No. 58. 
 
 estimates, at present prices, the portion of these lands north 
 of 42d street, at $1,268,000, and the portion between 42d 
 street and 23d street at $928,600. It will undoubtedly be 
 expedient to sell off the latter portion and turn it into money, 
 as soon as the approach of the compact part of the city shall 
 enable the Treasury to realize reasonable prices. 
 
 In the mean time, the Croton Aqueduct Board, con- 
 sidering the heavy taxes which must become necessary 
 to pay the interest on the Water Debt, feel it incumbent on 
 them earnestly to urge upon the Common Council the speedy 
 sale of those portions of the real estate of the city above 
 recommended ; and they would suggest, that for the pur- 
 pose of hastening that desirable step, the sale should be com- 
 mitted to a special and responsible department of the City 
 Government, to be specifically charged with that duty, and 
 instructed to prosecute the business with the same discretion, 
 and efficiency, that an individual proprietor would ex- 
 hibit in the management of his private affairs. If this shall 
 be done with promptness and fidelity, there can be no doubt 
 but that some three or four millions of dollars maybe speed- 
 ily realized, and applied in diminution of the Water Debt. 
 
 The interest annually payable on the Water Debt will 
 amount to $665,000, and that sum must be raised by tax- 
 ation, direct or indirect ; and it can only be reduced by 
 applying from time to time the avails of the Sinking 
 Fund, to the extinguishment of the principal and consequent 
 diminution of the interest. The taxable property in the 
 city, real and personal, is assessed for the present year 1842, 
 at 176 millions, real, and 61 millions, personal estate, in all 
 237 millions, and on which a tax will consequently be re- 
 quired of 28 cents on the 100 dollars. 
 
Doc. No. 58.] 550 
 
 The precise time when the Croton Aqueduct may be 
 deemed to have been completed, so that the interest should 
 begin to accrue, and from which time the monies necessary 
 to pay it should cease to be taken from the principal of the 
 monies borrowed, has not yet been accurately determined. 
 Probably the 1st of October, in the present year, 1842, may 
 have been taken as the starting point, inasmuch as the Board 
 of Supervisors have provided for raising by tax, for the in- 
 terest of the current year, the sum only of $ 475,566, or 20 
 cents on the 100 dollars, being a portion only of the sum re- 
 quisite for a full year, but sufficing to defray the interest 
 up to the first of August next. 
 
 It is at this point that questions have been raised, whether the 
 rents to be received for the use of the Croton Water cannot 
 be applied to the interest, or whether they must be retained 
 and added to the Sinking Fund, for the purpose of extinguishing 
 the principal ; or whether, as is proposed in the resolutions in 
 the Board of Aldermen, the Water Rents shall be relinquished 
 altogether, and our inhabitants permitted to take the water 
 into their dwellings and places of business free of charge. 
 The decision of these questions involves very serious conse- 
 quences, and they are entitled to a careful and candid ex- 
 amination. 
 
 By recurring to the report of the Water Commission- 
 ers, submitted to the Common Council in 1835, and by 
 the Common Council to the people at the Election in April 
 of that year, it will appear that it was then intended to 
 apply the Water Rents in the first instance to the interest. 
 " When the project," say the Water Commissioners in the 
 report, " shall be completed, the eventual receipts will more 
 than pay the interest on the capital expended, and the annual 
 cost of attending the works, and in due time leave a sur- 
 
551 [Doc. No. 58. 
 
 plus for the redemption of the debt that may be in- 
 curred." 
 
 The cost of the work was estimated in that report at 
 $5,512,236 72 ; but the Commissioners plainly intimated their 
 opinion, that the duty of paying the whole of the principal 
 might properly be devolved upon posterity, and the present 
 generation exempted from any portion of the burthen beyond 
 the payment of the interest. " A work of this nature," con- 
 tinues the same report, " is a boon to posterity of the first 
 magnitude, and it is but reasonable and just, therefore, that 
 as they are to reap the benefit of the project, and be enabled 9 
 as the population increases, and the income augments, to 
 discharge the debt without inconvenience, the first cost 
 of the work should remain a lien on those who succeed us. 
 The only obligation," it adds, " on the present generation, 
 constructing a work of this magnitude and importance, is, 
 that they pay the interest of the debt incurred, leaving the 
 principal to be provided for by those who come after them." 
 
 No attempt was made in the report to fix the time when 
 the principal was to be finally extinguished ; nor was any 
 calculation exhibited, or plan of finance prepared, that 
 would indicate which of the successive generations em- 
 braced under the term "posterity" were to assume the 
 burthen. The Legislature, however, by the law of May 2d, 
 1S34, had in some degree fixed a limit within which the 
 duty was to be discharged, by requiring that the time for 
 redeeming the stock should not be less than ten nor more 
 than fifty years. 
 
 The Common Council, however, by the law of May, 1835, 
 which was their first act of fiscal legislation, after the electors 
 had decided in favor of the work, in providing for an issue of 
 
Doc. No. 58.] 552 
 
 two and a half millions of stock, thought it proper, at the same 
 time, to lay the foundation of a fund for extinguishing the 
 principal, by enacting " that all the revenue to be received 
 for water to be procured by the said work, and fur- 
 nished to the inhabitants of the city, shall be especial- 
 ly appropriated as a Sinking Fund towards the re- 
 demption of said Water Stock." Similar pledges, and 
 in similar terms, are contained in each of the subsequent 
 laws of May 3, 1838, April 23d, 1840, and June 25, 
 1841 ; under which the successive issues of stock were 
 made, amounting in the aggregate to nine and a half mil- 
 lions of dollars. The Legislature of the State, in autho- 
 rizing the City Government to create the stock thus issued 
 from time to time, also sanctioned and enforced the pledges 
 given on the part of the city, in the law of 1835 ; for in every 
 instance thereafter, the Legislature, in granting the necessary 
 power to raise further amounts by loan, expressly enacted 
 that all the provisions of the laws before passed, pledging the 
 faith of the city, and providing a Sinking Fund for the re- 
 demption of the stock issued by virtue thereof, should be ap- 
 plicable to the stocks issued in pursuance of those subse- 
 quent acts of the Legislature. As a further manifestation of 
 the understanding of the Legislature in this matter, they em- 
 powered the City Government, by the law passed May 26th, 
 1841, to raise by tax upon the property of the inhabitants, 
 and situated therein, " such amount of money as shall be re- 
 quisite to defray the interest on the Water Stock." The 
 Aqueduct not having been completed and put in operation 
 until the 4th of July last, no tax was laid until the present 
 year to defray the interest. 
 
 The Croton Aqueduct Board are aware it may be con- 
 tended, that in the laws containing the pledges above referred 
 
553 [Doc. No. 58. 
 
 to, the word " redemption" is to be construed as synonymous 
 only with the words " payment of the interest and reimburse- 
 ment of the principal" : the phraseology employed in the State 
 Constitution in pledging the Canal revenues for the payment 
 of the Canal debt. But such is by no means a necessary or 
 a fair construction, so far at least as the public creditor is con- 
 cerned. For all rational pur poses the " redemption" of the stock 
 means its payment and extinguishment, and the Water Rents 
 which are declared to be pledged for that purpose, " as a 
 Sinking Fund," must, by all just intendment, be held and em- 
 ployed as a Sinking Fund, the peculiar office of which, as 
 the term denotes, is to sink, or lower, or reduce the amount 
 of the principal, and not merely to prevent the increase or 
 accumulation of the interest. 
 
 A fair construction of this pledge would, however, apply 
 it only to the nett rents derived from the Aqueduct, and 
 could not exclude the city government from the expenditure 
 of a sufficient part of the gross revenue, to pay for the whole 
 management of the Water Department, the repairs neces- 
 sary to keep the works in good order, and the additions re- 
 quisite to increase the annual income. The large outlay 
 indispensable, annually, for these objects, would present of 
 itself an insuperable objection in the present state of the city 
 finances, to the proposition that the water should be free 
 for each individual, to supply his dwelling, warehouse, or 
 workshop, without cost for its use, or at a charge greatly 
 reduced from the present prices. While those individuals 
 only, whose interest or convenience might prompt them 
 to take the water, would be relieved from the duty of 
 paying a fair equivalent for its use, the total relin- 
 quishment of the rent, or a material reduction of the 
 rates, would obviously lengthen the period of taxa- 
 tion, applicable to the whole community, which it is so 
 
Doc. No. 58.] 554 
 
 plainly the policy of the city to abridge. In either aspect, 
 we should disregard that rapid augmentation of the Sinking 
 Fund, to which the Water Rents, if preserved at their 
 present moderate rates, are destined very largely to 
 contribute. Upon the slow or the speedy progress of that 
 fund towards its object, it wholly depends, whether the 
 excess of general taxation in this city, over the amount its 
 inhabitants may bear without inconvenience, shall be of 
 longer or shorter duration. Nothing is more fallacious than 
 the idea, often expressed, that equality would be secured 
 in the use of water, by allowing each individual to carry 
 it whither, and employ it where, and in what quantity, he 
 pleases. Such a permission, besides that it would be irre- 
 concileable with any salutary control by the public, over 
 the great work they have erected, would at once cause the 
 most palpable inequality ; giving to each grade of wealth 
 in the community its advantages over that next below it, and 
 furnishing the man of business, to whom a large daily sup- 
 ply of water is part of his capital in trade, an aid from the 
 public, withheld from his fellow-citizens engaged in other 
 occupations. Positive equality in the matter, is evidently 
 unattainable ; but the nearest practicable approach to it, 
 will be found in the system now partially in operation, 
 and which will be fully carried into effect when the free 
 hydrants shall be established. The completion of that sys- 
 tem is only for a short time delayed by the necessity of a 
 sufficient trial, during the present winter, of the several 
 forms of hydrant proposed for use, before the city shall 
 incur the large expenditure which their introduction will 
 occasion. That system is the one to which the Corporation 
 and the Electors of the city pledged themselves in 1835 ; 
 and contemplates payment from all who have the water 
 delivered in their houses, or employ it in their business, 
 and exemption from payment, on the part of the poor, and 
 
555 [Doc. No. 58. 
 
 of all others who may receive it from the free hydrants, 
 " as a means of cleanliness, nourishment, and health." 
 
 The Croton Aqueduct Board cannot dismiss this part of 
 the subject, without adding the remark, that when the pledge 
 was given to the public creditor, of the proceeds of the 
 Water Rents as a Sinking Fund for the redemption of his 
 loan, it could not have been intended or received otherwise 
 than as an honest assurance that those rents should be near- 
 ly, if not altogether, an equivalent for the use of the water. 
 The performance should fulfil the promise. Before the 
 pledge was offered, the Water Commissioners had presented 
 to the Corporation, and to the Electors of \ the city, a tariff 
 of rates for the use of the water, which, though differing 
 in various particulars from that now in operation, being 
 in some of its charges arithmetically lower, was neverthe- 
 less positively higher in others, and much exceeded it re- 
 latively throughout, when we take into consideration the 
 great difference between the cost of the work as then es- 
 timated, and that which since has been actually incurred. 
 
 For a supply of water sufficient for all the wants of a 
 family, and furnished in such abundance and purity as to su- 
 persede the necessity of private wells, and rain and filtering 
 cisterns, the amount charged at the rates now established, 
 is less than the sums which heretofore have been readily 
 paid for a very stinted allowance of spring water, delivered 
 daily at our doors. It is submitted, whether rates of charge 
 not exceeding the limits announced by the city government, 
 in dealing with the public creditor, can be materially diminish- 
 ed, without destroying or impairing the means of redemption 
 solemnly appropriated for his security, and thus tarnishing 
 the public faith. The pledge is equally violated by the man- 
 94 
 
Doc. No. 58.] 556 
 
 ifest evasion, as by the bold denial, or avowed disregard of 
 the creditor's rights. 
 
 The amount of Water Rents, which will probably be real- 
 ized under the present rates, cannot yet be computed with the 
 certainty requisite to form the basis of a fiscal system. 
 The water was introduced into the city on the 4th of July 
 last, after most of our inhabitants had hired their present 
 places of abode for the current year ; and at a season when 
 landlords were not disposed to incur the expense of introdu- 
 cing the water, until the expiration of the year. From the 
 3rd of October to the date of the present report, being a pe- 
 riod of twelve weeks, during which the Croton Aqueduct 
 Board have received the Water Rents, 939 permits have been 
 issued, all expiring on the 1st of May next, yielding rents at 
 the rate of $16,635 for a full year. The amount actually re- 
 ceived for these fractional portions of the year is 89,542. 
 If the number of applicants should maintain the same ratio, 
 up to the 1st of May next, the rents for a full year would 
 amount to 872,000. It is to be expected that immediately 
 before and after that period, the number of permits will be 
 largely increased, so that the rents for the full year commen- 
 cing May 1st, 1843, may probably reach 8150,000. The 
 annual amount to be estimated beyond that time is necessarily 
 conjectural, but it may reasonably be anticipated to reach, at 
 the end of five or six years, the sum of four hundred thou- 
 sand dollars. We must be prepared however to expect some 
 delay in the general introduction of the water. The gross 
 receipts from the Fairmount Water Works, at Philadelphia, 
 (their rates being somewhat lower than ours), was 890,531 
 in 1834; 8111,883 in 1837; and 8141,339 in 1841. The 
 latter sum was paid by 21,528 water takers. The present 
 population of that city is 228,991, shewing about one water- 
 taker to every ten inhabitants. In the city of London, 
 
557 [Doc. No. 58 
 
 with a population of 1,400,000 in the year 1828, there were 
 177,100 water-takers, being one to every eight inhabitants. 
 At the ratio shown in Philadelphia, a population of 350,000 
 in our city, would furnish about 35,000 water-takers. 
 
 It will be necessary and proper, as before remarked, to 
 deduct from the Water Rents the sums necessary for cur- 
 rent repairs and superintendence, including the cost of fur- 
 ther pipes, or any additional structures requisite for the im- 
 provement or extension of the work. In no event should 
 the principal of the debt be increased beyond the twelve 
 and a half millions, the first cost of the work. 
 
 If the facts above presented be correctly stated, it will fol- 
 low that no part of the nett Water Rents will be applicable to 
 the interest of the existing debt, but that their only office will 
 be to aid in extinguishing the principal, and consequently that 
 the interest, now amounting to 8665,000 annually, must 
 be levied by taxation either on the general property of our 
 inhabitants, or upon such portion of it, or such particular 
 branches of their business, as ought in justice and good poli- 
 cy to bear it. And this brings us to the respective propo- 
 sitions introduced into the Boards of Aldermen and Assis- 
 tant Aldermen, and now referred to the Croton Aqueduct 
 Board. 
 
 In the Board of Assistant Aldermen it is proposed to levy 
 an annual tax of 3 per cent, on the rents of all the buildings 
 in the city ; valuing those rents at $9,750,000, on which 
 3 per cent, is 8292,500 ; and also a tax of one half of one per 
 cent, on all the personal property in the city valuing it at 
 865,000,000 on which the one half of one per cent, if 
 $325,000. 
 
Doc. No. 58.] 558 
 
 In the Board of Aldermen it is proposed that the inhabi- 
 tants of the city be permitted, at their own expense, to 
 take the water into their dwellings, stores, and warehouses, 
 free of charge : but that a Water Tax of one fourth of 
 one per cent, be levied " on all goods, wares, and mer- 
 chandize, sold within this city ; also, on commissions aris- 
 ing from the negociation and sale of all foreign exchange ; 
 also, on the cost of erection of all houses, and the building of 
 ships or vessels ; also, on all other manufacturing and me- 
 chanical productions ; also, on the salaries, fees, or perqui- 
 sites of all professions, when the same shall amount to seven 
 hundred dollars." 
 
 From other sources suggestions have been made of the 
 propriety of imposing a specific tax upon all the combustible 
 property in the city, as being specifically benefitted by the 
 increased protection against fire which the Aqueduct has 
 thrown around it. Others have proposed to tax the Fire In- 
 surance Companies on all the premiums received by them ; 
 while others have suggested that the city itself shall become 
 the general insurer of all the combustible property within its 
 limits. 
 
 The task is not easy, to select from these various and con- 
 flicting plans that which will best do justice to all our varied 
 interests, and promote the permanent welfare of the city. 
 Still more difficult would it be to apportion among the diffe- 
 rent divisions of property, by a pecuniary classification, the 
 different degrees of benefit which the introduction of the 
 Croton water has brought with it ; and the more so, be- 
 cause those particular benefits are inseparably intermingled 
 with the general benefit which the work has diffused 
 throughout all our interests. Thus the preservation of the 
 
559 [Doc. No. 58. 
 
 general health : the improvement of morals by increased 
 cleanliness and sobriety : the regularity and certainty of 
 commercial affairs secured by protecting the commu- 
 nity as a mass, against the general derangement of busi- 
 ness produced by extensive conflagrations: the increased 
 attractiveness of the city, by being rendered more com- 
 fortable, ornamental and desirable, as a place of business 
 or abode : all these enter as component parts into the 
 aggregate amount of general benefit, the value of which, 
 in dollars and cents, it is impracticable accurately to esti- 
 mate or apportion. 
 
 It is not to be doubted, however, that the sum total of this 
 general benefit, even now, and while the Aqueduct is only 
 in the earliest stages of its usefulness, far exceeds in pe- 
 cuniary value the interest on its cost ; and the reflection is 
 not only encouraging but highly gratifying, that while the bur- 
 then imposed by the work is either stationary or in a train of 
 rapid diminution, its benefits are destined to increase for ages 
 to come, with the expansion and development of the metro- 
 polis. The truth of this is strikingly manifest when we 
 compare the present with the prospective benefit conferred 
 upon those particular branches of property, which are 
 protected by the Aqueduct from the hazards of fire. The 
 combustible property in the city thus protected, may now be 
 valued at one hundred and fifty millions of dollars but 
 within no very distant future, it must increase to four or 
 five hundred millions, while the cost of the structure afford- 
 ing benefits so immense, and capable of such constant in- 
 crease, will remain the same. 
 
 There are now in operation in this city twenty-eight Fire 
 Insurance offices, besides several agencies of offices from 
 other States. The Board have ascertained that in the year 
 
Doc. No. 58.] 560 
 
 %_ " 
 ending on the first of May, 1842, the amount of premium 
 
 paid at twenty-five of these offices, for insurance of property 
 in this city, was $860,000. The value of the property in- 
 sured was about $100,000,000. It is probable that fully 
 one-third, if not one-half of the combustible property, 
 moveable and immoveable, in this city, remains uninsured, 
 though not the less protected by the Aqueduct against the 
 hazard of fire. If one third be assumed as the amount, the 
 present value of the combustible property may be taken at 
 150 millions, and the premium necessary, before the intro- 
 duction of the Croton Water, to insure it, at 1,290,000 
 dollars. 
 
 From the best information the Board have been able to 
 obtain, the rates of premium since the introduction of the 
 water have been reduced on stores and merchandize about 
 20 cents on the hundred dollars, and on dwelling houses 
 from 5 to 10 cents. It is probable that the rates on dwelling 
 houses will be still further reduced. The amount of pre- 
 mium saved cannot be less than 25 per cent, on the amount 
 previously paid, shewing a present annual saving, actually 
 realized, equal to one quarter of the 81,290,000 above stated, 
 or $322,500. 
 
 The question then arises, shall the owners of the property 
 actually realizing this annual saving of $322,500, be 
 subjected to a specific tax on the very property benefitted 
 yielding back a portion at least of that sum, or shall that 
 property bear only its rateable portion of a general tax to 
 be laid on all the property in the city, combustible and in- 
 combustible ? 
 
 And first, as to buildings the number of buildings in the 
 
561 [Doc. No. 58. 
 
 compact part of the city, is stated in the last annual report 
 of the Comptroller at 33,079 ; the value of which, if taken at 
 83000 each, would be $99,237,000, or say one hundred mil- 
 lions. A specific tax of ten cents, for the amount saved in 
 the insurance, on each hundred dollars of this sum, would 
 yield but $100,000; making it apparent that the propo- 
 sition introduced into the Board of Assistant Aldermen, 
 to impose a specific tax on these buildings of $292,500 by 
 levying 3 per cent, on the rent, would operate with undue 
 severity, especially as these very buildings form a large 
 component part of the real estate assessed at 176 millions, 
 and, in that shape, already pay their full quota of the general 
 tax. 
 
 And next, as to merchandize and other moveable proper- 
 ty the value of this description of property now insured, is 
 not far from 60 millions of dollars, and the total value, in- 
 cluding the portion left uninsured, may be one hundred 
 millions. It is not probable that any scheme of assess- 
 ment, however searching or inquisitorial, could detect more 
 than that amount. It is true that a tax of 20 cents, for the 
 amount saved in the insurance on each $100 of that sum, 
 would produce $200,000 ; but the question arises whether 
 in the present depression of our commerce and manufac- 
 tures, the imposition of such a tax, striking directly at both 
 those interests, and burthening, as it would, not only the 
 merchandize in the warehouses of our merchants, but the 
 stocks in trade in the work-shops of our mechanics and 
 manufacturers, would be consistent with sound and enlight- 
 ened policy ? 
 
 There is, moreover, a legal objection to the tax pro- 
 posed, which must be disposed of before discussing its 
 expediency. The constitution of the United States pro- 
 
Doc. No. 58.] 562 
 
 f* 
 
 hibits the individual States from laying any imposts or duties 
 on imports. The Supreme Court of the United States, in the 
 year 1827, elaborately examined the effect of this prohibi- 
 tion upon a law passed by the State of Maryland, requiring 
 importers of foreign merchandize in that State to pay a tax 
 for a license for that purpose ; and in deciding upon its va- 
 lidity (Brown vs. State of Maryland, 12 Wheat. Rep., 442) 
 the Court declared that the right to import implied the right 
 to sell, and that any impost or tax by a State on articles im- 
 ported which had paid duties to the United States on the 
 importation, before those articles should have been once sold 
 and thus mixed up with the mass of property in the country, 
 would be unconstitutional and void. " While the thing im- 
 ported," says Chief Justice Marshall in pronouncing the 
 decision, " remains the property of the importer in his ware- 
 house, in the original form or package in which it was im- 
 ported, a tax upon it is too plainly a duty upon imports to 
 escape the prohibition in the constitution." 
 
 The effect then of this prohibition would be to prevent 
 the levying of a specific tax either for the Croton Water 
 debt, or any other purpose, upon all that portion of the mer- 
 chandize in question, consisting of foreign imports remaining 
 in bulk, or original packages, in the hands of the importer, 
 embracing, it is believed, at least one-third of the total 
 amount ; while the burthen of the tax would fall exclusively 
 upon the retail merchants or smaller traders, who might 
 have purchased the remaining- two-thirds, and thus have mixed 
 it up in the general mass of the personal property of the 
 city; so that, in effect, the tax would be laid exclusively upon 
 our own citizens, while the foreign importers or their agents, 
 who are the very persons that the advocates of this mea- 
 sure particularly seek to reach, would escape altogether. 
 

 563 [Doc. No. 58. 
 
 In respect to the other branch of the proposition in the 
 Board of Assistant Aldermen, to lay a specific tax of one half 
 of one per cent, on all personal property, it is to be observed 
 that personal property, when found by the assessors, already 
 pays the same rate of tax as that which is borne by real estate : 
 to wit, 10 cents on the hundred dollars to the State, 
 20 cents to the city for the Water Debt, and 55 cents to 
 the city for general purposes. There seems to be no good 
 reason for imposing an additional burthen of 50 cents on 
 this description of property alone, and so far as it might 
 operate to drive monied men and monied capital from the 
 city, it would be unwise and inexpedient. 
 
 The proposition " to levy a Water Tax of one-fourth of 
 one per cent on the sales of all goods, wares, and merchan- 
 dize sold within the city," has also been attentively con- 
 sidered ; but it would seem to be equally open as a specific 
 tax on the merchandize itself, to the constitutional difficulty 
 above adverted to. 
 
 And even if this difficulty were removed, as some 
 have proposed to do, by assuming the tax in question to be 
 only an exercise of what are called " police powers," and 
 therefore not within the intent and meaning of the Consti- 
 tution, yet the Croton Aqueduct Board, after duly weigh- 
 ing the advantages and disadvantages of the measure pro- 
 posed, feel bound to declare their belief that any specific 
 tax on merchandize or merchants, which would operate to 
 burthen or discourage commerce, is of very doubtful expe- 
 diency. They need not urge, what indeed must be ap- 
 parent, that the trade of this commercial city supplies the 
 very life-blood of its existence. The land on which it is 
 built is comparatively worthless, except as a seat of commerce, 
 and a place for traders. To this great and cardinal interest, 
 95 
 
Doc. No. 58.] 564 
 
 all others~are necessarily subordinate. To foster commerce, 
 to encourage traders, to afford them every necessary 
 facility and protection, to render our city, as a mart of 
 trade, accessible, safe, cheap, and commodious, has hitherto 
 been our steady policy. With the interests and prosperity 
 of our merchants, the interests and prosperity of our land- 
 holders are inseparably interwoven. Experience has taught 
 us little, if we have not learned that real estate languishes 
 when commerce declines. We cannot clog or obstruct this 
 vital stream of our prosperity without paralyzing all our 
 permanent interests. Our merchants have just passed 
 through a calamitous period, and real estate has correspond- 
 ingly suffered. Can it be wise at a moment like the present, 
 just as the prospect dawns of a reviving commerce, to fetter 
 it with a tax, novel in its character, inquisitorial in its details, 
 vexatious in its collection, and, to say the least, of doubtful 
 legality ? The tax might possibly extract from merchandize 
 and merchants 8200,000 annually, and lessen to that amount 
 the general tax on the aggregate amount of real and person- 
 al property, but could not the owners of our 33,000 houses 
 better afford to sustain alone the whole of that burthen, being 
 but about six dollars on the average for each house, than to 
 experience the diminution of rents which an embarrassed 
 trade is sure to bring with it ? 
 
 The same remarks apply with similar force to that part of 
 the proposition which proposes a tax " on all manufacturing 
 or mechanical productions." By the recent census it is 
 shown that 43,380 of our population are employed in " man- 
 ufactures and trades." They form a very valuable and desi- 
 rable portion of our community, and it would be injudicious 
 in the extreme, by a specific tax on the products of their 
 industry, to induce them to transfer to other cities them- 
 selves and their families. 
 
565 [Doc. No. 58. 
 
 The proposition to tax " the cost of erection of all houses, 
 and the building of ships and vessels," would appear to be 
 liable to similar objections, as tending to impede and embar- 
 rass those particular branches of our mechanical industry'; 
 and inasmuch as the augmentation of the water revenues is 
 principally to be occasioned by the increase of houses, it 
 can hardly be good policy to discourage that increase by 
 imposing additional burthens upon the cost of their erection. 
 
 The proposed tax on " all commissions on the negotiation 
 and sale of foreign exchange," it is believed would be diffi- 
 cult to enforce, so as to arrive at any thing like equality 
 while the inquiries it would be necessary to prosecute, re- 
 quiring a disclosure of the private affairs of all persons re- 
 mitting monies to foreign countries, would probably be felt 
 by our citizens as being vexatious and oppressive in the 
 highest degree. 
 
 As to the proposed tax " on salaries, fees, and perquisites 
 of all professions," it may be observed, generally, that no 
 tax on particular offices, professions, callings, or trades, can 
 be permanently popular, except as forming part of a general 
 income tax a measure which hardly seems called for by 
 the present exigency. 
 
 In respect to the suggestion which has been made, that 
 a tax should be laid on all Fire Insurance Offices for premi- 
 ums received by them, it will be obvious that such a tax 
 would drive the business of insurance wholly into the hands 
 of foreign Insurance Companies beyond our jurisdiction, 
 and consequently not amenable to our laws. The pro- 
 position that the city itself should become the general insu- 
 
Doc. No. 58.] 566 
 
 rer of all the combustible property within its limits, in the 
 present state of public opinion, which calls rather for a di- 
 minution than an increase of the liabilities and of the busi- 
 ness of the city government, is plainly inadmissible. 
 
 . 
 
 From the examination thus made of the various pro- 
 positions and expedients for raising the interest of the Water 
 Debt by specific taxes on particular branches of property or 
 business, it appears that objections of greater or less force ex- 
 ist against them all ; while, on the other hand, it is certain that 
 a general tax will take from the aggregate amount of property 
 assessed no more than a just equivalent for the aggregate 
 benefit it receives. It doubtless is true that particular por- 
 tions of the property assessed may receive greater benefits 
 than other portions from the introduction of the water, but 
 the same remark would apply to many other heads of city 
 expenditure, few of which could be found diffusing their be- 
 nefits in more just proportion than the Croton Aqueduct 
 throughout every portion of society, and every branch of 
 business or property. 
 
 It is believed, however, that the general system of taxation 
 now in force, and to the operation of which we are accus- 
 tomed, might be improved by the adoption of efficient mea- 
 sures, which should bring within the reach of the assessors 
 considerable amounts of personal property, that now es- 
 cape taxation, not only for the Croton Water, but all other 
 city purposes. The total amount of personal property as- 
 sessed is but 61 millions of dollars, whereas it is known that 
 the taxed capital of the rnonied incorporations alone, exclu- 
 sive of their real estate and stocks not taxable, amounts to 
 825,564,677, to wit : 
 

 567 [Doc. No. 58. 
 
 Of the Banks 816,388,452 
 
 Fire Insurance Companies 4,535,214 
 
 Marine Insurance Companies 2,004,987 
 
 Trust Companies 2,631,424 
 
 $25,564,677 
 
 And that there is due to individuals, on 
 mortgage, at least forty, and more pro- 
 bably fifty millions, but say 36,000,000 
 
 Making an aggregate of $61,564,677 
 
 When it is seen that these items alone exceed the total 
 amount of personal property assessed, and that they embrace 
 no part of the shipping, State and city stocks, foreign bank 
 stocks, capital employed in trade, and debts not on mortgage 
 belonging to our citizens, and justly taxable under existing 
 laws, it will be evident that a large amount of personal pro- 
 perty, and probably equal in value to at least sixty-one 
 millions, in addition, now escapes taxation, and contributes 
 nothing to the expenses of the City Government. Any 
 improvement in the present mode of assessment, which 
 should bring the property thus escaping within the reach 
 of the assessors, would annually extract from it not only 
 $170,800 for its share of the interest of the Water Debt, but 
 $335,500 in addition towards the general expenses of the 
 city. 
 
 In conclusion then, the Croton Aqueduct Board, while en- 
 tertaining the highest respect for the sources from which the 
 resolutions referred to them have proceeded, nevertheless 
 feel bound to report, that in their opinion the adoption of 
 those resolutions would not be advisable, and they therefore 
 
Doc. No. 58.] 568 
 
 ***:**.*; 
 
 recommend that existing laws be left unaltered, except so 
 far as may be required to render more efficient the present 
 powers of the assessors ; that the interest on the Water 
 Debt be raised, as at present, by a general tax on all 
 property, real and personal ; and that the Water Rents, 
 now pledged to the public creditor, be continued at moderate 
 rates, and scrupulously applied, together with the proceeds 
 of the public property not required for public use, to the re- 
 demption of the principal. 
 
 The Board are not unmindful, that the tax which the 
 Aqueduct thus renders necessary, may be viewed with 
 apprehension by many of their fellow citizens, and espe- 
 cially by some of the landholders of our city, but it is 
 confidently believed that these apprehensions will be dispel- 
 led or lessened, when the amount of benefits received shall 
 be compared with that of the burthens imposed. It is not 
 to be denied that for the first few years the tax of twenty- 
 eight cents on the hundred dollars in addition to our other 
 taxes, may be felt to be inconvenient, but that ratio will 
 steadily decline with the gradual reduction of the principal 
 of the debt, and will be further lessened by the increase of the 
 city, by which the burthen will be more widely distributed. 
 The tax, even if it were retained at this its highest rate, for ten 
 years to come, would require a contribution, for the whole 
 period, amounting in the aggregate to less than three per 
 cent. and who can doubt but that, within that period, the 
 effects of the Aqueduct in promoting the growth and pros- 
 perity of the city, will add more than three per cent, to the 
 value of real estate? The revenues of the work for the first 
 few years, small and but moderately increasing, will ere 
 long yield an amount nearly if not fully adequate to all the 
 wants of the city treasury. Little could be gained in 
 
. -* 
 
 569 [Doc. No. 58. 
 
 the way of present relief, by relinquishing those revenues, 
 but much might be lost in our future resources. The work, 
 if properly cherished, may become a perpetual fountain of 
 wealth to the city, affording a revenue as far beyond 
 our present estimates, as the income of the Erie Canal has 
 exceeded the anticipations of its early projectors. 
 
 By pursuing then a steady and careful policy, we shall 
 soon lighten materially the present burden of taxation, keep 
 it in continuous and rapid diminution, and effert an extin- 
 guishment of the whole debt, even before the times fixed 
 for its redemption. The Water Rents, freed at that period 
 from the pledge which now guarantees their specific appro- 
 priation, will then amply contribute to such purposes of pub- 
 lic utility as the expanding interests of the community may 
 require ; to the payment, in aid of very moderate taxation, 
 of the general expenses of the city; or to the advancement 
 of objects which experience and honorable competition may 
 suggest, as requisite to secure its enduring superiority in 
 industry, enterprise, population, and wealth. 
 
 JOHN L. LAWRENCE, 
 J. PHILLIPS PHCENIX, 
 M. VAN SCHAICK, 
 C. W. LAWRENCE, 
 SAMUEL B. RUGGLES. 
 
 New York, Dec. 27, 1842. 
 

 
 * 
 
 *. 
 
 rji 
 
 
 
 " 
 
RETURN TO the circulation desk of any 
 University of California Library 
 
 or to the 
 
 NORTHERN REGIONAL LIBRARY FACILITY 
 Bldg. 400, Richmond Field Station 
 University of California 
 Richmond, CA 94804-4698 
 
 ALL BOOKS MAY BE RECALLED AFTER 7 DAYS 
 
 2-month loans may be renewed by calling 
 (510)642-6753 
 
 1-year loans may be recharged by bringing 
 books to NRLF 
 
 Renewals and recharges may be made 4 
 days prior to due date. 
 
 DUE AS STAMPED BELOW 
 SENT ON ILL 
 
 JUL 1 7 2001 
 
 U. C. BERKELEY 
 
 1 1 ZOQ5 
 
 12,000(11/95) 
 
THE UNIVERSITY OF CALIFORNIA LIBRARY