The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1886-01-30
Anti-Mortgage Tax Arguments.

mortgages The Sun declared
That such tax would be double tax;
That the mortgagors would be required
to nav the tax thus imposing further bur
dens upon the borrowing class;
That capital would be driven from the
state;
That capitalists would refuse to lend, &c.
These are assertions, and assertions are
easily made. But upon what reasons the
assertions are founded, the San does not
state. That journal, and all other oppo-
nents of tax on mortgages, repeat the
same every time the question is brought up,
but neither give facts nor arguments to sus-
tain them, or even make them plausible.
As to mortgage tax being double tax,
it would be only single tax on those who
loan money on mortgages. The only dou-
bic tax about it. is the requirement OF the
mortgagor to pay on chat he does not o'o",
which he has been doing. He will be will
ling to continue to do so, for the taxation
of mortgages will lessen the rate and relieve
him somewhat.
As to the mortgagors being required to
pay the tax, the assertion presupposes a
cupidity and lawlessness on the part OF
capitalists that many are not prepared to
admit. If covenant to require such
payment were forbidden by the law taxing
mortgages, it would be an act Of lawlessness
to evade it.
As to capital going away from the state,
the question arises, where would it go?
Mortgages are taxed in all the contiguous
states; all the banks are full of money,
seeking safe investments at low rates, as
shown by the recent bids from the North
and East for the loans of Baltimore city
and Pittsburg, Pa, and the eagerness with
which good loans at three and four per
cent. are eagerly sought; outside of bank
stocks and some railroad stocks, that are
rarely ever to be obtained, there are but
few good securities that will pay as much
interest as mortgages, with the tax deduct
ed. The manufacturing interest is over
done, and the most prosperous pay but
small dividends. Farming lands, as mere
investments, in the hands of tenants, are
not sought. Buildings, with consequent
taxes and insurance, are not desirable in
vestments, either. Where, then, are IN
vestments to be found? Money is plenty,
and when that is the case, interest is low.
Besides, persons who have money to loan'
especially in the rural districts, desire to
invest it close to home.
As to capitalists refusing to loan on
mortgages, we have shown above that few
other securities, bearing an equal rate OF
interest, are to be found. Capital that is
not employed, is of but little use; and those
who have surplus will loan it, If SIX
per cent. cannot be obtained, they will take
five, and four if five cannot be gotten, or
any other rate, rather than have capitalize.
1t is true that some of the mortgages in
existence are so worded that if tax is ever
imposed, the mUrtSaSor must Pay at, but
that sort of provision can be prohibited.
Those now in existence will be paid off in
the course of five years, at the fartherest,
and the money now in them will either be
re-invested in mortgages or in some other
manner, that will yield revenue to the
state.
Every man should be willing to pay his
just proportion of the expenses of govern
ment, as the constitution requires. The
man who has his means invested in untaxed
mortgages is not doing so. 1t is no ex-
cuse for him to say that the land upon
which the mortgage rests is taxed. He,
whose means are meagre pays that, while
the capitalists who loans him money goes
free. Some who have money to loan, say
that six per cent. is low enough rate
That may be, but money is a commodity
now, and its value is governed by the sup
ply. 1t has been cheap for some years
past, and will be for some years to come.
He who can realize six per cent. is fortu-
nate. Many are glad to invest at three
and four per cent.
In New York, Philadelphia and Boston
time paper is readily taken at from three to
five per cent interest In the Philadel-
phia Ledger of last Saturday about 81
SOC, 1000 are advertised for loan on mort
cages at from four to five per cent, in sums
to suit, on either country or city property.
From the Ledger's financial article on
Monday, we take the following, as sustain
ing our views on the scarcity of good in
vestments and the great amount of idle
capital:
The most important recent development in
financial circles is what may be called the
mania which has appeared since the opening
of the new year for starting new financial pro-
iects. New banks, trusts, land title, mort
gage, DullQlnB anu luNeSIiucHt vi
ali kinds, characters and pretensions are be-
ing started, and their stock appears to be
eagerly taken. There have come out this
month in Philadelphia the announcements of
new corporations of this character aggregat-
ing some $30,O00,000 of capital when fully
paid up. The great ease and abundant sup
plies Of money, together with the very high
prices of good investment stocks and bonds,
and the low dividend and interest rates that
they consequently pay, have largely prompted
this rush into new enterprises for dealing in
money and securities. There is great danger,
however, that this business may be overdone,
for it is very easy to get into a corporation,
but often not so easy to get out again. From
the complaints made of the want of paying
business by the officers of the many existing
banks, trust companies and similar moneyed
institutions in this city, one might suppose
that there were enough financial facilities ex-
listing for the amount of business offering, as
many of these older corporations have great
stability and solid line of trade built up by
years Of patient industry through the exer-
tons of officers of great skill and experience.
Hence, with their plethoric Golfers, and the
existing machinery for making loans and sup
plying financial demands which is not by any
means at present fully employed, one might