Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1883-02-25
A MEMORIAL.
THE BUILDING ASSOCIATIONS COME
BEFORE THE LEGISLATURE.
Taxation-A Bill Which will Cure the
Evil Complained Of.


To the Honorable Senate and House of Rep
resentatives of the State of Minnesota:
The undersigned we're appointed com
mlttee by a meeting of the Building Associa
ton League of the State of Minnesota, where
there were present members representing
fourteen building associations, to ask the
| Legislature to amend the tax law so as to de-
fine more particularly their duties as tax
payers.
They desire to have section % of chapter
| IL amended so that thew may have the same
privileges allowed all other joint stock associ-
ations 10 offset their Indebtedness against the
| value of Their stock, and against their mortg-
! ages which alone give value TO their stock.
! They ask that this may include the only in
debtedness they have amounting to anything
viz any sums they may be legally required
to pay their members on due notice and de-
mand on Withdrawal or payment OF their
loans.
The monthly instaiIments which these
members pay out OF their savings constitute
what is called stock, but which is really
nothing more than deposites In saving bank
liable to be Withdrawn on 80 or go days
notice, and therefore simply debt against
the association. To tax these is to AK our
debts, instead Of taxing our property. 1t
would be precisely as if our savings banks
and other banks were to be taxed for what
they owe their deposltOrs. Whereas, while
official and other reports show that the aver
age deposiyes of the banks OF st. Paul are
over eleven millions Of dollars with only
S247 900 taxed, the reports of the ST. Paul
Building Associations show that their de-
posts are $4,000 with every dollar taxed
sfY RI
our associations from taxes, tho this is now
about to be done in Pennsylvania-the reve-
nue. commission TO whom the last Legislature
referred the subject having reported in favor
of it-but to define the Indebtedness which
is allowed to be deducted now by all cor
porations and to include in this the indebted
ness of the Building Associations to their
members which is their only Indebtedness
generally. And therefore unless this is
included and allowed to be de-
Quoted, these associations will
be the only corpora ions in the State paying
taxes on their stock without the privilege of
this offset
1t is certainly wrong to single out these
associations made up largely of poor men
and working people, banded together for
mutual aid, saving small per cent Of their
wages to prepare for days of sickness, or to
invest in a home tor their families
and place tax upon them which is not
placed upon any other corporation IN the
State
Mutual Benefit and Mutual Aid societies
are expressly exempted now from taxation,
the law dealing with them as benevolent as
socIations.
The building associations deal only with
their own members, are really only Mutual
Aid and Benefit Associations, and do no
business with the general public for profit
ike ordinary corporations. They have no
stock like other corporations, for ne other
corporations allow their stockholders to with
draw all their installments with interest, and
demand the value of their stock as debt to
be paid them. To call such deposits stock
is misnomer. 1t is in no sense stock, but
simply deposit withdraw bic on notice and
demand, and therefore debt against the
association. If the associations own real es-
tate or any other personal estate, it is taxed,
and they do not object. They ask simply to
be put on par with other taxable associa-
tons, and to have the privilege to Offset their
debts against their stock and their mort
cages, and to pay on the surplus balance
only, precisely as other associations do.
They admit that this would leave them
only nominal tax on their stock and their
mortgages; but this is the case with large
majority of the corporations of the State.
Very lew pay on stock. They pay on their
real estate and their other property. We
propose to do the same. No one pays on
mortgages except for the balance il any
observation-disclosures.
The Public Ledger of Philadelphi Jan.
20, in an article advocating the entire ex-
emption Of these associations from taxes
on the ground that il is double taxation,
states that the 'capital stock" of
these associations in that State amounts to
thirty millions of dollars, and that fully so
per cent of this thirty millions has been lent
to members of the societies and IS represent
ed by real estate going to improve and
build up the cities, towns and villages, in
crease the value of real estate and provide
the people with homes" To tax these saw
ings, it says is to ''impose big fine in the
form of double taxation on thrifty people for
trying to get homes for themselves.
Their stock which the present law taxes, is
taxed already in this real estate where the
Ledger says $50 per ent. of it goes, 'making
it double tax. So the State gets the ad-
vantage of it in this form and does not lose
the taxes.
We might well ask to be exempted entire
ly for these reasons, and placed on
the list of Mutual Aid and Mutual
benefit associations, or like savings banks
which pay nothing on their deposits-or like
benevolent associations dealing only with
their own members. But we do not ask this
Tax us for all our other property, but not
6y double taxation.
Tax US for all our other property, but not
for our debts
To tax us on our stock is to double ard
treble our expe nses and to discourage the
working classes and the young men from
saving their earnings and building homes in
our midst and becoming permanent and
thrifty citizens. To tax these associations is
to crush them out and destroy their useful
ness. 1t is to drive the people into thrift
less Use of their savings and discourage
habits of frugality soberness and economy.
To crush out these associations is to lose to
every community banking capital amount
ing in the city of ST. Paul to about $4,000
per month, to be used to build up the city
and attach the citizen to the soil. Not only
is this banking capital lest to the communl-
ty, but the same small earnings now aggre-
gated into useful capital, become scattered
and sGuandered in habits of idleness, ex-
travagance and vice.
For these reasC ms we urge the Legislature
10 foster and encourage these institutions By
making their taxes as light as possible, or at
least by refusing to make them double and
Al Il