The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1879-02-21
LETTER FROM DR. LOGAN
On the Interest question.
Editor MonRnn,oWn Pat. 54

ing 10 House bill No. 2O7, which does yer,
great injustice 10 my motives and inten
tons in introducing the same; and at til,
same time, in my humble judgment, mis-
apprehends not only It's purpose, but also
It's practical operation, in case 1t should
become q law. Iregret that you did moi
have an opportunity 10 examine the bill
before your article was written. enclose
a printed copy Of same, which hope you
will publish with this letter, not only as
an act Of justice 10 myself, but In order
that your readers may have an opportu.
nifty 10 correct any erroneous impressions.
In regard to the measure, which your ar.
ticle may have given them.
/ do not hold any bank stock, never did.
and have no interest in any banking
concern. | have been a borrower during
my entire business life, and II myintercsts
are on one sidemore than another, they are
on the side Of the borrower. recognize
the necessity OF o low rate Of interest for
all legitimate business, and especially for
those who are engaged in agriculturaipur-
suits. Thepurpose Of the measure, which
| introduced, was in a practical way to
secure to such borrowers the relief which
under existing conditions cannot be had
from any other source.
It Is proper to say that the measure ia
not now in the shape OF bill, as origin
ally intended, but as an amendment 10 n
Senate bill, relating TO assessments, You
will notice that 1t provides that all mort
cages and deeds OF trust shall be exempt
from taxation, when properly listed on the
assessors books, and when the interest
thereon does not exceed the legal rate.
! will not dispute the theory Of your
proposition, that the proper course would
be toexempt the land 81 the debtor from
taxation to the amount Of the mortgage
therein. Your argument assumes that
taxing the property, and also the mort.
gage, Is double taxation. Such is the
theory held in California, and perhaps in
some other States, wherein this theory,
mortgages, but not the property mort.
gagged, are exempt from taxation. Such Is
the theory on which my proposition Is
based. A practical objection to allowing
such exemption to be applied to the pro.
perty itself as urged by distinguished writ
tiers upon political economy, is the tempta.
ton 1t would present to the placing OF
fictitious liens upon property as screens,
against taxation. Further practical
difficulties in the way Of such
exemptions, are forcibly shown in an
article on Framing Of Tax Laws" written
by the distinguished Thomas n, Cooley,
and published in the Southern Law Ha.
view, of June and July, 1873. Assuming
that the exemption Of the property itself
from taxation. s-impracticabie, but one
mode OF relief remains, namely: To ex-
empt the mortgage Itself. Such. is the
practice in California, as / am informed,
and the proposition Is seriously and favor,
ably discussed In some OF the New Eng
land States and elsewhere, by some OF The
best writers on taxation and finance in
the country. The question which now
concerns us, however, is whether this ex-
emption upon the conditions, defined in
the amendment, will benefit the debtor.
1fit will not, do not want 1t. Let US in.
quire into It's probable results,
The complaints in regard to usury, come
mainly from those in agricultural districts.
Those who have mortgaged their real es.
tate from any cause, are especially op-
pressed at this time, because the value Of
their property Is deprecated, and the
value Of Its products as well. 1tisof great
importance to them that they should be
able TO carry, their loans at the lowest nos.
sible rate OF interest. Where Is the money
to come from, for their relief, as matters
now stand? Not from the banks. II Is
not their business TO loan money on mort
cages. They cannot safely do SO. The
present insolvency Of a multitude OF Bank
Ing and Saving Institutions Is owing to
the fact that they have permitted the
money OF their depositors to flow into
mortgages on real estate, on which
they were unable to realize when
the hour Of danger came. Even
II banks could safely loan the
funds OF their derositors on mortgages,
they could not do Il at 4 rate which would
meet the wants Of the olaas 10 which |
have referred. Their expenses, their
taxes and their risks in commercial paper,
discounted on personal security only, in
most cases, ore such thatit would be i'm.
possible for them TO afford the relief which
Is desired. Where then IS the Mopny to
come from? Ianswer, mainly from funds
in the control Of administrators, trustees,
guardians, insurance companies and indi.
viduals OF means, who. do not wish to
take the risks and cares OF discounting
commercial paper, orof Investments which
require constant personal supervision,
Such persons usually prefer long loans "a
short ones Dust the kind farmers generally
want and with, them safety and security
are mora important than the rate OF In
terest. THIS, however, even with
them is an important consideration. A,
things now stand, are they likely to loar
at 6 per cent on mortgages however SO
cure? We think not. Under our Law.
all monies loaned on mortgages, or othel
property, or II not loaned, are subject 4
State, county, municipal and district tax
alton, The aggregate OF this taxation il
counties ranges from one to two per cent
and will probably average one and one
half per cent throughout tho State. Thi
would leave the lender, on an average
but Al per cent for the use Of his money
4 Willie accept II? In great majority o
cases he will not, and because he can d,
better. Ohio permits contracts to b
III tklltup WI httu Anp W WtVAel " p lpt
cent Pennsylvania permits corporation
To sell their bonds, below, par, . an,
borrowers on mortgage are allowed /
contract TO pay, in addition To interest a
6 per cent, the taxes on the money lent
The most important competitor, however
lis the United States Government with II
par cent bonds. j need not occup
space In showing that q 4 per cent bond
with lis absolute security, It's punctus
payment Of interest, Its perfect convert
blity and It's freedom from taxation, Is
better Investment than any mortgage
which can only net the lender Al to 5 pc
2 cent Of most, and on which the tntere.
) may default or tho principal be- reache
. only by foreclosure, with the inteFgsI
lion, possibly, OF the delays and expense
connected TO q greater or less extent wit
Ruch procedures, DIS, n. ~. = re