When the Cambridge City Council met Tuesday night to hear Councillor John J. Toomey attack Harvard and Radcliffe as a "half-far passenger, with a special privilege pass, on the omnibus of municipal progress," and when it ordered rotund Mayor John W. Lyons to appoint a committee of citizens to discuss taxes and "other pertinent issues" with University officials, it was reviving a question that has long been a monkey-wrench in Harvard-Cambridge relations.

The ancient controversy over taxes flared into prominence last fall, when Toomey fathered a Council resolution asking that Harvard be made a separate city, providing all its own municipal services.

Harvard Traditionally Exempt

The issue is more simply stated than solved. From the University standpoint, educational institutions are traditionally tax-exempt. Harvard has brought great prestige and considerable purchasing power to Cambridge, and while admittedly removing large pieces of property from the city tax list, has raised the value of adjoining real estate.

What City Hall sees is a vast tax-exempt "inland Empire," assessed at $164,298,020, more than the total taxable value of Cambridge, White the city provides police, fire, and health protection, ever since the opening of the subway much of Harvard's, purchasing power, once a Cambridge monopoly, has been shifted to Boston. Moreover, it has been charged that the House system has cut into-the local restaurant and boarding-house trade.

University Not Wholly Tax-Free

Harvard, however, is not wholly tax-free. To Cambridge it pays an annual tax bill of about $65,000 on property not used for educational purposes. And under two agreements, one signed in 1912 and the other in 1928, the University has voluntarily paid on legally tax-exempt holding, taxes totaling $160,700. The voluntary payments reached a peak of $24,216 in 1931, and amounted to just over $10,000 last year.

Under the 1912 agreement, retroactive to 1908, the University undertook to pay to the city as "rent" on land along the Charles now occupied by some of the Houses, an annual sum of $2,400 in perpetuity.

In 1928 President Lowell and the late Mayor Edward Quinn signed a complicated agreement governing Harvard-Cambridge tax relations for 20 years.

By the terms of this document, Harvard agreed to pay taxes on property acquired after July 1,1928, the amount to equal the current tax rate each year applied to the assessed value of the unimproved land as of date of purchase. For the past five years this annual payment has hovered around $7,500.

Moreover, the University agreed that for property held on July 1, 1928, but which might thereafter be built on for "educational purposes," it would not claim its legal right of tax-exemption at a rate greater than 10 per cent a year. Under this agreement, which is the one Toomey wants amended, Harvard has paid about $40,000.

Possible Solutions

Possible solutions that have been put forward to meet this recurring problem include the establishment of a "greater Boston" metropolitan unit, whereby Boston would share the expenses of servicing Harvard, the allocation of costs of servicing Massachusetts' many educational institutions among all the tax-payers of the Commonwealth; and the payment of Harvard to the city of a "service fee," similar to that now being paid by F. H. A. projects