Census Bureau on statistics of cities having a population of over 30,000, the net indebtedness per capita of the five leading American cities for the year 1905 is stated as follows: New York, $118.91; Chicago, $33.33; Philadelphia, $44.80; St. Louis, $32.15; Boston, $113.34.' In the ten years from January 1, 1898, to January 1, 1908, the New York City budget for municipal purposes increased over 100 per cent: from $70,175,896.84 to $140,449,731.39. During the same period the net funded debt increased 131 per cent: from $232,248,785.89 to $537,577,801.03. The recent publication of these 2 and other statistics has led to considerable discussion and to the awakening of a wider public interest than has hitherto been manifested in the the important question of municipal expendi

ture.

Comparative statistics of cities are notoriously misleading. Expenditures are variously classified, revenue systems differ materially, and the divisions of expenses between cities and state and national governments are very dissimilar. Thus in

1 Here, as in the subjoined table, the extreme variation between the city of Boston as an economic unit and the same city as an area of municipal government renders the statistics of Boston misleading for purposes of comparison with cities where there is a comparatively close concordance between these two different concepts of the word city. Cf. Edgar J. Levey, "City Expenditures and Population," in the Real Estate Record and Guide, December 5, 1908.

2

Edgar J. Levey, New York City's Progress towards Bankruptcy (Privately printed, New York, 1908).

$15,085,346 $73,710,000 $45,385,coo $26,784,coo $20,164,000 $7,850,000 25,141,812 95,319,000 69,980,000 38,668,000 29,314,000 19,255,000 8,827,482 39,071,000 10,630,000 10,897,000 28,912,000 6,496,oco

• December 1, 1908.

2 Estimate for December 1, 1908.

On December 31 of each year.

1 Health Department estimate for December 31 of each year. During the five years 1898-1902, inclusive, new corporate stock (funded debt) issues amounted to $146,653,270.78; during the next five years 1903-19c7, inclusive, to $282,472,155.06-annual averages of about 29 and 56 millions, respectively.

Appropriations for state and county purposes omitted. For some of the earlier years state taxes were levied through the city or county budgets; later, through taxes collected directly by the state, of which, of course, the tax-payers of New York City contribute their proportion, though the amount thereof no longer appears in the budget. No such difficulty arises in comparing appropriations for purely municipal purposes.

European countries the national governments contribute largely to the funds for municipal purposes. Boston, besides paying for its own hospital for the insane, included in its budget (1907-08) about two and a half millions for payments to the commonwealth of Massachusetts. New York, on the other hand, is relieved by the state of the care of its insane and pays from its budget practically nothing in the way of state taxes. The citizens of New York, of course, pay their full proportion of the state expenses, but these do not appear in the New York budget and the taxes necessary therefor are not levied through the local authorities. But while comparative municipal statistics are misleading, correct conclusions may be drawn from statistics of single cities as regards growth of debt and of expenditures. Such statistics for New York City are presented on the preceding page.

For the vast increase of debt and taxation in New York City various causes may be assigned. Those which seem to the writer the principal causes may be stated as follows:

(1) Inefficiency in administration due to the personal incompetence of officials. Waste from ignorance or carelessness, which comes under this head, is an important factor in all large American cities. The remedy is of course political.

(2) Inefficiency due to defective administrative methods. While good methods are less important than good men, they are nevertheless essential to economical government. Capable officials will accomplish fairly efficient results with antiquated methods of administration, just as a clever workman will manage to get along with old-fashioned tools; whereas the best. administrative methods devisable will be of no avail if their application is entrusted to incompetents. Strictly speaking, this cause of waste is a result of inefficiency due to personal incompetence, since the right men in office should have intelligence and energy enough to devise and install proper methods.

(3) Dishonesty. This is closely connected, at least, with the two foregoing causes. Its prevalence, extent and importance is often exaggerated in public opinion. The cure is obvious.

(4) Indifference of the electorate to problems of municipal government. This is probably more noticeable in New York

than in any other large city in the world, and, as a cause, is contributory to all others. The difficulties of popular education are vastly greater in municipal government than in national affairs. In national politics occasional decisions are required upon issues more or less clearly defined. In municipal government, constant attention must be directed to the numberless problems of what is practically the management of a great and complicated business enterprise.

(5) The consolidation of the present boroughs into the Greater New York. This change made it appear necessary to unite the several boroughs physically as well as politically, by proper transportation facilities, and to spend large sums of money in bringing the outlying boroughs up to an urban standard in many matters which had been neglected, as, for example, in the matter of street paving. Under this head it should also be noted that the salaries of city employees living in the semirural boroughs were "equalized," that is, they were brought up to the highest standard prevailing in Manhattan, regardless of differences in rent and in the general cost of living. While this cause of increased expenditure must be regarded as exceptional, and its force is now largely spent, it should be remarked that the atmosphere of extravagance which it engendered is still present. Just as an individual finds it difficult to reduce expenses after he has become accustomed to extravagant living, so city officials, having become accustomed to bond issues of sixty or seventy millions a year, now "think in large figures" and have to some extent lost their appreciation of the value of money.

(6) Expansion in the field of municipal activities. Under this head come all the varied phenomena of municipal socialism, and here we are brought face to face with the problem which seems destined to become of supreme importance in the future history of New York and of other cities, and which it is the object of this article to discuss.

Brief reference has already been made to the great increase in debt and taxation which has marked the development of New York since consolidation-an increase altogether disproportionate to the city's increase in population. If for a few

years following consolidation there had been an abnormal increase in expenditures, due to the causes above mentioned, and if expenditure had then become stationary, or had increased only in proportion to the increase of population, there would have been nothing in the situation to arouse apprehension. The statistics of expenditure above presented show, however, that the rate of increase has been much greater in the last five years than during the five years previous. It is this progressive increase which excites alarm. Should the ratio of the recent increase in the budget be maintained for the next ten years, the city would then be facing an annual expenditure of $370,000,ooo, which would represent a per capita tax of about $54 as against $26.25 in 1908. It is not so much that taxes today are high, though there is much complaint on that score; it is rather the fear of future confiscation of realty holdings, and especially of equities in mortgaged properties, that has aroused genuine anxiety in taxpayers. Let us therefore consider how the further development of municipal socialism will affect the finances of New York City. In doing this we may ignore those elementary protective functions which are always discharged in modern urban communities; we may pass over the fire department, the police, the courts, the correctional institutions, etc., though even in these there is opportunity for vastly increased expenditure; and in considering possible outlays for social betterment we shall confine our attention to the lines of municipal activity to which the city is already in principle committed.

I. Education. More than one-quarter of New York's entire budget, exclusive of the debt-service, is now devoted to this purpose. A considerable part of the outlay is for secondary and higher education. Little has been done, however, in the way of technical training. Without departing from principles of government already recognized, trade schools might be established and developed, with the result of almost doubling the cost of public education. Again: it is now a tenet of our government that municipal duty towards children of school-age is not limited to merely offering opportunity for education. Education must be enforced by means of truancy laws, and the physical welfare of the child must receive attention in order