Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1884-11-01
THE THIRD AMENDMENT assIN

The proposed s..---. amendment Should
be voted down This journal has co nstant-
" held that a tax upon mortgages is taxa
ton upon the property of the borrower.
The tax rules the rate upon which money
is loaned, and the rate is always adj isted TO
save the lender the cost of the taS, But
tAe people set up . system in the new Con-
siitution Intended to defeat these financial
axioms That instrument for purposes of
taxation treats mortgages as an interest on
the property affected. 70 The extent of the
tax, an ownership of the property is thus
created in the lender The third amend
ment to be voted upon proposes TO con-
ginue this legal fiction of joint interest but
provides that in cqualizing taxation the
State Board shall not have the power 10
raise the rate upon mortgage. IN con-
sideriug this question the other day, the
following Illustration was used, and we
cannot DO better than to reproduce it:
Suppose the farm Of \ to be located in
county upon which the State Board of
Equalization raises the asses ncnt ten per
cent The County Assessor in fixing the
valuation upon the farm determined by
that valuation the proportion If interest
between \ ana j., who hei, Il mortgage
upon IT, The farm being mortEasei Tor
-, 500, thu Assessor declares that il WIS
ln3r;ra.ed FOR about one. half of its value.
lie assessed to \, the mortgagor, =, GEO of
= f..N
The County Board Of Equalization act upon
the matter and sustain the assessment as
originally returned. But the State Beard
of Equalization. for reasons perhaps en-
mortgages. finds the general valuation Of
property in that particular county ten per
cent. lower than in any other county in the
State Ii therefore raises the entire assess
ment Of ,l,. county ten per cent. Should
the third proposed amendment he
adopted the inscrc-, Of \ in the land is
thereby assessed nj $500, while the
interest Of b would remain al $5,9aJ'
Now since the Constitution iur the pur-
poses cl taxation makes Il mortgage an in
tercSt In the land. there is created is the
amendment an ,rreconcil,lblc contradiction,
| for ii the mortgage is ri interest in The
realty. It should follow the property, as we
| have before said, in all the vicissitudes Of
ownership. In fact the Constitution for
purposes Of taxation b!ots on; The mortgage,
merges it into an interest i'll The property
and it is thus 10 all inteuts and purposes
of the premises realty To adopt the third
| amendment, therefore. is to erect a new
inconsistcncy-to make a mortgage for one
purpose an interest in property, and for
another . mortgage standing upon its own
| feet. If mortgages are 10 be taxed, why
| should not the interest of the mortgage he
! operated upon by equalization, as well as
! the intorc,. OF the man who borroNs the
money and gives The secGrity? Again
debt may bc worth more than upon its face
is called for; it may be ola character to
command premium; as in the case of an
investment for 4 long period at an un-
chaneeable rate of interest, with security
| ample and non depreciable Such credit
| is property, and capable of private owner
| ship, as the Constitution declares Mort
cages, however, are not always listed by
assessors at face value, since they do not
always secure the debt fully, and the prop
/ crty often depreciates in value. To pro-
vide against raising the assessment upon
mortgages is, therefore, TO provide for a
| frequent defeat of just equalization. either
/ to relieve from over assessment or under
| valuation