The Cecil Whig. [volume] (Elkton, Md.) 1841-current, 1882-01-14
AN IMPOLITIC PUBLIC MEASURE

lie question, but one that has broader
and more important bash. than the mere
hostility of borrower against lender. in
which the arguments of the advocates OF
the taxation of mortgages to" frequently
find their inspiration.
With all due respect for the business
intelligence of those who favor such taxa
fion, instead of being founded in Wis
lom and sound public policy, we be-
'ieve that demagogish ingenuity could
not devise more disastrous public meas
IRE. or suggest 4 more efficient means of
distressing individual industry, and re-
tarding the general prosperity.
Twice within the last forty years the
State of Maryland has oppressed her
struggling industries. by the imposition of
this burdensome tax. in which the rich
landowner and the moneyed gentleman
of leisure, who need not to borrow. zee
so much justice; and just as often has
her Legislature been compelled, by rea-
son OF it's injurious tendencies, to abolish
it.
BY the assessment act of 1871, which
extended very widely the area of taxa
ton in the State, tax was imposed upon
mortgages. 1t was regarded as an ext
sency of the times. and the same sophie
norc appeals were made for its IMPOSE
ion then, as now.
There was not at that time an indus
,eeded the benefits of cheap capital, that
Toes not now equally need them.
Yet the experiment was an ignomini-
,uS failure.
Instead Of being attracted to it. capital
vas driven from the State. for the sim
Die reason that in adjoining States. un-
Ter more favorable laws. money could
he borrowed more cheaply upon landed
security, than under law in Mary land.
that first taxed the land. and reimpnsed
duplicate tax on the security based on
+.
The law was repealed in 1855.
Some ten wears later under the pres
IRE of the same class who are to day
crossing it's re enactment. a second law.
.imiar in character. was passed. which.
liter some modification in 1867. restrict
ny the exemption to purchase money
mortgages that remained in the hands of
the original mortgage. it was finally
absolutely repealed in 1870.
So much for the uniavorable history Of
such law.
The objections that reason and com
non sense suggested at the time Of its
passage, experience subsequently con-
irmed.
The law proved double taxation upon
the needy borrower.
If the Legislature were to re-enact the
law tomorrow. one or the other of two
conditions must follow. Either the mort
.agor must. in selfprotection. he secured
~ law against the imposition of the tax.
II the burden must fall upon him as the
| borrower Practically he assumes it in
me form or another If not i'll the shape
IF a covenant to pay all taxes on the
loan, as now warranted by law, then i'll
the form of bonus over and above the
net interest.
| Ii the first alternative named be adopt
ed condition is created that the lender
will not accept. and borrowing must
cease. to the prejudice of those who need
business accumulation.
And just here lies the fallacy of the
| argument in favor OF taxation of mort
cages. 1t is based upon gross miscon,
ception of the nature of money.
| Money is merchantable commodity.
and like every other commercial article,
will command its market value. The
man that has it to sell, will place it in
| the market where it will command the
| highest price. and where as lender his
capital is hampered by the fewest un
| favorable conditions.
! What better illustration need any man
seek of this rudimentary fact, than the
| utter and absolute nsclessness of usury
| laws.
| In Mary land six per cent. is the lega
rate of interest. 1t is so fixed by the
| ,rganic law of the State. What regard
is had of the constitutional limit in the
commercial transactions of our people
I Il. 81, ,,..l,,
tiate his business loan at five per cent.
within ninety days ne may pay nine witt
less Inconvenience than he previously pai'
tive per cent. The fluctuations in thu
money market. the rise and fall OF thu
! price of money. following fixed and un
| Manageable laws of trade, go on cease
essly, uninfluenced by any question o
| legislative restriction fixing usuliuu
| rate.
In fact. as an able lawyer recently re
| marked in our hearing. the only use of :
lsury law is i'll the Legal depreciation o
contracts. by the terms Of which no rat
| # interest is specified.
Just as no usury law will prevent ia,
| giving and taking of higher than til,
| -gal rate Of interest. So no mortgage
ak guarded as it may be even by 4 crim
| sal penalty. will protect the borr"w-'
rom the additional burden the mort Jag
| LAX will impose on him.
| Why:
| For the simple reason that capital i,
independent. If it cannot seek secur'
md remunerative investment ia thi,
state, it will so elsewhere. But the ad
| rncate of this measure should not in thu
| meantime forget that it is the poor maj
sbo borr"ws. whether struggling manu-.
| lcturer. merchant. mechanic. or farmr,
'ud the effect of any measure that affects
The security he has to offer, is an addi
innal burden he is t. bear for the &C.
.mnmodation he needs.
Newspaper essayistS may descant yer:
beautifully upon the abstract question {"
| he equal distribution of the burdens
| government, and expound theories tina,
ire not in practice worth the paper they
ire written on.
| There are immutable laws of finance
md trade that are self-regulating.
| The price of money, like that of every
| .ther commodity. is regulated by the
laws of supply and demand, unaffected
| ny legislation.
You may impose conditions upon the
lender, favorable to the borrower, but
| ,-ou cann1.t farcn the lender q acnent