New-York tribune., 1873-01-20
TAXPAYERS BURDENS.
EXEMPTING BONDS AND MORTGAGES FROM
TAXATION.

NOTED BY THE REPEAL OF THE PRESENT
| STATUTE.
| In view of an expected animated discussion
in the legislature during It's present session. on the
quest Of exemptng bonds and mortgages from TAXA
ton, THE TRIBUNE has obtained the opinions OF prom
ne,t real estate regarding the proposed meas
ure and also the phases OF the question developed
since last Winter when bill ofexemption was defeated
al Albany. Petitions have been literally circulated
throughout the city, praying the Legislature to pass the
Exemption act pending, and 1t has been signed by
hundreds OF real estate owners and others Interested III
| the development OF the resources Of the State.
Cyrus Clark large real estate owner OF this city,
when visited by a reporter Saturday, expressed the
opinion that the matter OF vital importance to the
material prosperity OF the city and State He claims
that II is double taxation it taxes both land ana
mortgage when, in fact. it represents only the land
He says that builders and people interested in city
| improvements find great difficulty in borrowing
upon mortgage fear OF taxation. For instance the
tax upon York, last year, three per cent and
the lender, being limited TO per cent on account
OF the usury, only four per cent net remained IL Is
evident he said, that no one will lend money at four
| per cent when he can buy railroad mortgages
below par, which pay the same interest and
| are not matters Of record, but easily be
| concealed from the tax assessors. He can also
buy Government bonds interest and principal payable
In gold which are also free from taxation. 1t is plain
that people will not invest in mortgages when they can
buy other securities yleldlng hRner rate vi ItSieSt
The consequence is that builders have great difficulty In
borrowing upon mortgage, and have often to submit
10 commission or brokerage of from TO 10 per cent,
which divided between the broker and lender, In order
to protect the latter against taxation. IL the tax De
taken off, money that Is sent West TO be loaned upon
mortgages and railroad bonds, thereby escaping tax
| alton here, will be kept in the home market.
and be used for building purposes; and this In short
time will than counterbalance, by increased value
OF property any reduction which may from the
exemption. New-Jersey has drawn largely from an In
dustrous and enterprsng class OF population for the
past years. owing 20 its having exempted mortgages
in the four counties adjacent to NewYork There has
been opposition the farming sections, but this is
fast disappearing the subject is becoming better un-
derstood and it is very likely that Gov. Dixs recon-
mendaton will be adopted and the tax repealed 1t Will
be better however have the act take effect on JAM l.
1884, the tax lists will soon be made out for the year.
INJUSTICE THE TAX.
W. H. Raynor OF No Pine-st. gave the following very
interesting The law taxing bonds and mortgages
il one OF the most unwse and unjust exisng unwse,
because turns the food OF money rom New YORK ana
other States be loaned where the law taxing bonds
and mortgages has been wisely repealed; unjust be-
cause property is thereby doubly taxed The State
should have right to do this than creditor to
demand OF his debtor double payment Of the same
debt think NewYork built more houses 20 years ago
than It building yearly. 1t was then the custom
for capitalists, insurance and trust companies to make
loans upon before completion, by advances as
the buildings went up; but this custom has
almost disappeared. At that time it was
an easy matter for 10 procure n
loan on house OF lot for onehalf TO twohirds Of its
value a reasonable charge 1t is now difficult mat
to raise than 40 per cent upon good property
costing from to IS per cent-charges in one way or
another Most OF the money now loaned upon property
is by life and trust companies, and doubt II
they would lend as much they not compelled 10 DO
| tbeir I W he
five years It will become impossible to raise any money
on bonds and mortgages New-YHrk City property,
and in of such event the city will cease to grow
The why capitalists and executors re-
fuse TO lend on bonds and mortgages in New
York is that they invest money in New
Jersey and Pennsylvania, and reap per cent
clear Of taxation This s why five buildings have been
erected in New-Jersey TO one IN New-York cannot
II they ignorant OF the matter az issue et thel
know that the revenue derived from bonds and mort
cages this city does not exceed s50O0a mere drop
i'm the bucket; also that IL these bonds and mortgages
should be relieved from the unjust burden Of taxation
in less three years the increased revenue from
taxation new improvements IN TINS city and west
the whole state would derive similar benefits. Every
farmer the State could then raise so cent upon the
valuation Of his farm II he desired ana develop IL ana
bring the market. For the past 25 years have
loaned millions OF dollars on bonds and mortgages but
have never been able to raise one dollar upon iarm in
MUNICIPAL sTUMBLINGBLocK.
William r. Martin has identified himself with this i'm
illustrations of the subject comprehensive He said,
in substance: contend that to bond and mort
gage land, personal property while the same land
pays tax as land is double taxation of the prop
erty. For example: two men own lots side by side
worth $4,000 apiece; one man is obliged to borrow
$40 900 in order TO build he f. taxed the valuation of
$4,000 and the mOrtgagee Is taxed for his $4,000 loaned
the house and lot are only worth $4,000, !
however, and the taxation is increased because |
owning the adjoining lot has and spare the $1,000
building, and therefore he is not subject to the addl
that clear, bare OF the case no one
will attempt to justify the tax 1t cannot be JUSTIFIED ON
any principle. When lot is mortguged the value OF the
property increased; II Is arrangement OF the
ownership. by which one man has priority OF estate
for fixed sum, and another mas the residue. a man
afford to lend money at per cent on mortgage
aud run the risk OF paying or per cent upon IT, dns
down prices and checks building For years millions of
dollars 20 the city, from capitalists in Germany
and England to Chicago and the West, because there
bonds and mortgages untaXed. III t had stopped
here the growth the city would have been enormous
manufactures OF Newark, Paterson and other cities
In that portion New-Jersey equal TO the famous
manufacturing towns of England, and there is no
could not have been built up Harlem River. except
this double taxation cannot be met by mangactur
and builders NewJersey knows this and the state
authorities exempted bonds and mortgages from taxa
tca because they knew that II would cripple New.fork
by drawing away Its capital and labor The principal
obstacle the passage OF the Exemption D, namely
the opposition country Legislators, is disappearing
and the Governor has recommended II, the Legis-
ture appears TO look at the matter fayOrdDly Cosy
there should be an amendment to the law
EXEMPTION NEXT TO RAPID TRANSIT.
Edward Matthews az large real estate owner feels
keeny the injustice Of the existing taxation on bonds
and mortgages and has for years endeayored TO have
the law repealed. He said, among other things, the
owner OF real estate already taxed much heavily
than the owner any other property and II the mort
gage taxed also he tax twice on the same prop
erty. know OF many large real estate owners VINO
would put up and houses their land II tAey
could borrow the money These houses would add to the
wealth of the city well as 10 the taxable property,
giving homes thousands and tens OF thousands OF per-
sons who are now forced out of town for
want OF residences. IL would tend TO bring men
OF wealth from other cities reside here ana wonld
materially reduce the expenses Of living in New. York