Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1884-10-31


Hon. David \. Wells is generally recog-
niHed as the most eminent American think
or and writer upon politiCo-ccUuOmical
questions. He has devoted his entire life
to their study, and deserved recognition
was accorded him when he was appointed
one Of the tax commissioners of New York.
to revise the system of taxation of that
State. His name carries great weight with
it, it need not be said, and his opinion upon
any question of taxation is authoritative
We therefore consider ourselves very fOrtU-
nate in having obtained from Mr. Wells il
statement Of his views upon the subject of
the taxation of mortgagcd real estate. His
letter is brief but comprehensive, and will
he read with interest and we doubt not
with profit. 1t is as follows:
NORWICH, Conn, oct. p. lsS4.
Dear Sir have yours of the I'D, asking
my views about the oNpcdicnCy of taxing
mortgages on real estate, and in reply would
say
| have no time at present to write at any
length on this subject ;amd there is no uccc--
~ity that should do 50. The whole case is as
it were ina nut shell, and is 50 plain. in my
opinion, THAT he who runs may read" and
also undcr~tand.
No one will lend money ON real estate or
other security. except for the ordinary or
average rate of interest ultanahlc for other
investments, risk on security, and convent
cncc being taken into consideration. If now
such loans, as represented Toy notes. mort
Cages, or credits, are taxed in such way ;lo to
reduce the rate of interest below the average
and this is always the effect of such taNutiuni
one of these results will follow The loans will
either not Ice made, or the borrower will in
some way rccoup the lender for the tax to
which the credit is subjected, tuau extent sui
ficicnt To give the latter the ordinary rate of
interest, and something more for the trouble
in advancing the tax. Tine borrower, there
fore, will pay the taxes ON the property mort
gagged, or bought ON credit, and also ON the
mortgage or credit which is not property
but only the representative of it, and no
amount of sophStry or sharp reasoning can
prove the contrary To these who desire
practical and irrcfutablc evidence of the cor.
rcctuc~S of the assertion, reference is made t.
the testimony ON this subject given before "A
committee Of the Massachusetts legislature
session of lSNU :; and to the argument OF Hon.
john G.. Ropes of Boston, March 3, l~>i before
In" joint committee of the two Houses ON
taxation, during the sam" year. Two points
further may Ice noted. First. that the Ni~~H-
chu>ctt, legislature of lo,l, ultcru FUN hear
ing by its committees, refused by large ma
jority to repeal the existing law of that State
cNcmptiug luuu> ON mort gago, of real estate
from taxation Is personal property, th.i, tc--
ttNlng thdt the experience of Massachusetts
in mIhiug such exemption had been iu the
opinion of the Legislature, beneficial and Soc
oud. that no hi4hy civilized country in rhc
world, other than the United states. eyer
thinks Of cunctmg amy such taxes, mo- matter
how hard put to it. they may bc for raising
the utmost possible revenue.
am yours, most respectfully.
DAVID \. WELLS.
As may be seen, Mr.. Wells takes sub
stantiully the same ground rs that hith-
crto taken by the FREE PRESS He shows,
as we have all along maintained. that the
mortgageOr pays the taXnot only upon the
mort gagged real estate but also upon the
mortgage; and that the burden is as I'M
just as it is grievous, requires no argu-
meut to prove. We respectfully submit
all this to our legislators, and ask them to
grant some measure of relief to our strug-
Cling farmers and mechanics.
AS to the Massachusetts law doing away
with the abuse of which we are speaking,
we submit the following letter from Gam
allel Bradford, Esq, the distinguished
writer upon sOcio-pOlitiCal questions =
CAMBRIDGE, oct q, lsS4
Dear Sir;-l have received your favcr of the
2}d asking for me information as to the law by
which Mortgages ON real estate in MasSachu-
sets eject exempted from taxation.
That law was passed after popular agitation
extending over ten years. 1t was dcmonStm-
ted over and over again that the taxation of
mortgages involved the taxing the same prop
clty twice, inaSmuch rs mortgage creates
no new value; that this double taxation falls
almost wholyon theburrowcr,as the capitalist,
even when he cvIdcs taxation, cNacts from
the debtor enough extra interest To pay the
tax; that thereby thc.mun who builds with hor-
rowed capital is taxed twice rs much rs the
man who builds with his own capital, ana en-
tcrprise is discouraged; that the tendency is
10 drive capital ont of the state iorinNeStmcnt.
To the one argument that exemption would
raise the taxes on other property, 1t was an
swcred that if II tax is unjust and impolitic it
is not justified 10y the fact that some people
gain by it,
The bill for exemption twice passed the