cal difference between any given amount of debt aggregated on the State at large, or distributed amongst its civil divisions. In either case it would rest on and be paid from the same sources of revenue. Some deduction, however, should be made for the exceedingly valuable and, in many instances, productive property owned by several of our principal cities. The estimated value of the real estate, belonging to the corporation of the city of New York, in 1862, including the Croton water works, was $42,000,000, one-half of which was productive; and there are other cities owning productive property to a considerable amount. In any event, it is safe to say that the property held by municipalities represents at least an additional $35,000,000, and it is therefore proper to deduct that sum from the local indebtedness, which would reduce it to $54,000,000.

A third incumbrance on our resources, is our proportion of the debt of the General Government, given in an official report on the 1st of October, 1867, at $2,500,000,000 nearly. If this debt were to be paid by a direct tax on the value of property, the pro. portion which each State would be required to pay, would be determined by its representative population, in conformity with the 2d section of article 1st of the Constitution of the United States, which requires that "representatives and direct taxes shall be apportioned amongst the several States which may be included in the Union, according to their respective numbers." On the basis of the apportionment of the $20,000,000 direct tax in 1862, the proportion of New York would be $325,000,000. Under the next census, however, our proportion would be less, for the reason that each succeeding enumeration shows an increase in the representative population in the west and north-west, while it dimin-1 ishes that of the north and east. If paid under the present revenue laws, based on the 8th section of the same article, which provides that "all duties, imposts and excises shall be uniform throughout the United States," the share that would fall to this State could not be ascertained with any degree of accuracy, without deciding, preliminarily, what proportion of the goods and commodities, domestic and foreign, paying internal and customs duties in this State, are consumed here.

As there is no present answer to this question in the form of conclusive evidence, we leave its solution to those who desire to enter the domain of speculation and conjecture, with the remark that it is by no means to be admitted that the amount of duties

paid by the citizens of this State under the internal revenue laws, falls directly on those who pay them. Taxes of this description are supposed to fall mainly on the consumer, and it is therefore impossible to prove which system of taxation would impose the heaviest burthen on this State, in the payment of the debt of the United States, without showing first what proportion of the articles on which duties are paid here are consumed by our own population. Nor is it at all certain that the present system of internal duties will be continued until the debt is paid. It has already been repeatedly modified, and may be abrogated, as was that in force during the war of 1812, in favor of some other system, under which the 'proportion in which the burthen would fall on the several States might be materially changed.

The power of taxation is a concurrent power, and Congress may at any time exercise it over any or all the sources of revenue, and to any extent it may deem proper. There is no rule, then, by which we can estimate the share of New York in the national debt, with any degree of accuracy, except that of representation. If estimated on the assumption that it is to be paid under the present or any other plan of indirect taxation, there is only presumtive evidence of the correctness of the conclusion arrived at, whether it be more or less than the sum stated.

But even if it could be demonstrated that the goods and commodities, foreign and domestic, on which internal and customs duties are imposed in this State, are wholly consumed here, it would furnish no more conclusive evidence of the amounts which our citizens are annually contributing to the payment of the national debt, than it would of a per capita distribution of wealth vastly greater than has been supposed. Duties, such as are included in the internal revenue system, are not usually considered as involuntary contributions for public objects, because each individual can,' to a certain extent, decide for himself how much he will pay. Except in respect to articles of prime necessity, he can reduce his proportion by reducing the quantity he uses or consumes, and thus bring his expenditures within his ability or inclination. Duties and taxes are not, in fact, equivalent terms, nor are they used as such in the Federal Constitution. The former are rather voluntary, whilst the latter are forced payments towards the support of government, and it is fair to assume, therefore, that the voluntary contributions of a community are no greater than their means will allow. If, then, the citizens of this State

pay one-fourth or one-fifth of all the revenue duties, as has been claimed, they must be possessed of one-fourth or one-fifth of the aggregate wealth of the country. It is difficult to see how the one proposition can be affirmed and the other denied, and hence the conclusion would be that, whatever the proportion of the National debt with which the State of New York is fairly chargeable, she is just as fairly entitled to be credited with the like proportion of the national wealth. In other words, if the, rule of population is no guide in determining our part in the national indebtedness, it is equally inapplicable as the measure of our ability to pay it.

The unliquidated claims against the United States can have no place in an exhibit of the financial condition of a State made up on the theory of excluding everything, whether in favor of the debit or credit side of the account, that rests on no better evidence than mere speculation and conjecture. These claims have been. estimated at a fabulous sum, but it may be stated on the high authority of the recent report of the Finance Committee of the United States Senate, that the amount of claims pending under existing laws, and likely to be allowed, is less than $40,000,000; and these will be paid out of funds already or hereafter to be appropriated from current receipts. There is no present probability that any portion of them will ever be included in, or form a part of, the funded debt of the Government, and no propriety, therefore, in considering them in an estimate of the indebtedness of this State.

show that, on the 30th of State, over and above the $9,000,000, and that the

The foregoing facts and deductions September, 1867, the liabilities of the value of its productive property, were liabilities of its civil divisions, with a like deduction, were $54,000,000, making in all $63,000,000. To this sum must be added $325,000,000, estimated as our proportion of the debt of the United States, and we have an aggregate of $388,000,000 resting on our resources, and to be paid within such period and under such a system of taxation as the laws of Congress and of this State may prescribe. If the whole of this debt were represented by a stock, bearing six per cent interest, payable half yearly, the principle redeemable in thirty years, it would require as a contribution to its sinking fund the annual sum of $27,833,000, which, if raised by a direct annual tax on the property within the State fairly subject to assessment, would be three-fifths of one per cent [A. 3.-S. 3.]

3

on its present value nearly, assuming it to be $4,500,000,000, or about sixty cents on one hundred dollars.

It will be seen that the estimate here made is based on the assumption of a sale of State and municipal property, and a direct application of the proceeds to the reduction of the debt. Such a disposition of the canal has had advocates both in the Legislature and the Convention, and has been urged through the press. But as this may be said to be against public policy, an opinion in which the Comptroller concurs, it is proper to add here, that if the force of the objection is conceded, and the estimate made on the opposite theory, it would raise the rate of taxation, as previously stated, much less than might be supposed. The debt would be increased by the sum of $70,000,000, but the interest on the increase would be met by the income of the public property, State and municipal, and there would be required annually for the sinking fund, a tax sufficient to produce $28,654,000 nearly, which on a valuation for the whole State, assumed here to be $4,500,000,000, would increase the rate to sixty-four cents on one hundred dollars.

Such are our debts and liabilities.

What are our resources?

To answer this question satisfactorily, it will be necessary to consider first the value of the property within the State subject to taxation, and second, its annual gains and profits, or the annual results of capital and labor.

If the annual returns of the boards of Supervisors, represented the actual value of property, it would in some degree justify the gloomy view that has been taken in official quarters of our financial situation, present and prospective. The evidence, however, is convincing that such is by no means the case, but that on the contrary, the value of the property held by our citizens and its annual gains subject to taxation, is vastly greater than is indicated in the returns made by the local boards to this office; so much greater indeed, that no one would ever think of referring to the assessment rolls, as any criterion in establishing the value of real property on a purchase or sale. The assessments as habitually conducted, are merely conventional estimates of property, made by the local boards, at rates far below its intrinsic worth. Although the existing laws require an estimation at the actual value, there never has been a period since the institution of the present system of taxation, where it has been practicable to enforce the rule. The cause of this difficulty has been frequently stated in the reports.

from this department, and it is unneccessary to refer to it here. Every intelligent person is aware of the non-observance of the provision of law referred to, as well as its results, and it is safe, therefore, to assume, that real estate is assessed far below its value, and that the larger portion of personal property escapes altogether. Can the extent of this undervaluation and concealment of property be ascertained, or, in other words, what is the actual value of the real and personal property of the State.

In 1866, the equalized value of real estate, as returned to this office, was $1,236,288,147, including the value of cities and villages. In 1860, however, the State Assessors who are required by law to visit every portion of the State once in two years, for the purpose of obtaining information bearing on their duties as members of the State Board of Equalization, estimated the value at $1,945505,000, and in 1864, at 2,169,365,000. These estimates were the result of laborious investigation and a careful inquiry and comparison of facts gathered in every part of the State, and yet, from the imperfect system of classification adopted, the results arrived at are not claimed to be anything more than approximately correct, perhaps not even that. There is, however, just as good ground to believe they are too low as there is that they are too high. They are only used here as corroborative evidence from an official source, that the opinion generally entertained as to the under valuation of real estate in the assessment is correct, and not with any view of presenting them as a true measure of value.

The same observation will apply to the State census of 1865. The statistics relating to property though important, are too incomplete, and their arrangement too defective to admit of their use as evidences of value in any higher sense than as presumptive proof. Thus, the value of all the dwellings in the State, together with village and city lots, but excluding farms, is given at $977,000,000, and the value of farms including the dwellings at $920,000,000. Under this classification farm dwellings are included in both amounts, whilst buildings other than dwellings with the lots on which they are erected, are excluded from both. It is manifest, however, that the last item must at least equal the first, and therefore the two amounts just given making an aggregate of $1,900,000,000 nearly, may be taken to represent the census valuation of real property in the State at large. The conclusions arrived at from the comparison are, that the equalized assessments of real estate for 1866, in the aggregate $1,236,288,147, were