The Kimball graphic. (Kimball, Brule County, Dakota [S.D.]) 1883-1905, 1888-12-21
Ty,e vax on II

---4&4 EGAg aH
TIE TAX on Mortgages.
ST. Paul Pioneer Press:--Every man
who has ai heart the prosperity of Mime
sofa hopes most earnestly that the iegis-
latures soon TO assemble viii abolish II
Of the obstacles standing stubhornly in
the way OF our development, the useless
and obstructive tax o levied on mort.
cages. Wedo not see how it can stand
for one moment the test of Intelligent ex
animation. or coafse The reason for The
original imposition Of this burden was
the suppnsitjon that it weuld operate as
q tax on capital. If 1t acted in this way,
it might still be open TO argument
whether such legislation is best for the
interests of the whole peoplo, Bat it is
not necessary to consider that side OF it
at all; fur the plain fact, which the most
ignorant can scarcely fail to realize, is
that it is, in practice, a tax OF the Dor
rover and not on the lender; and that it
operates as a harmful and unjust dis
elimination against Minnesota capital, to
the prevention of our advancement and
the loss Of those OF our " citizens who
have amassed money by contributing to
Minnesota's progress and to thu increase
of her wealth:
The simple net result of the tax on
mortgages to-day is to raise the current
rate of interest on money borrowed in
ay;n,arata FROM n .,ar rnDt ~ G Al
that Is the concrete fact which we wish
to commend to Legislators always, ready
to act against usury laws, and to protest
against the unjust exactions of capital,
This exaction, this iner ease OF nearly 9
per cent In the burden laid upon the Dor
rover, this weight more grieyous by far
than that of any tariff laws, exists only
by our own act, and will disappear us
sou as tho tax on mortgages is repealed.
The rate of interest in any community is
fxed BIZ the circumstance of that com
munity itself. When wealth is scanty
and are undeveloped, the i'm
mediate necessities Of the people decide
what they will be obliged to pay.
Money may g~o;begging at 4 per cent in
New York, wiiile ii eaNnat he obtained
iu a new and needy tevsitary atleSs than
10. With the Increase Of home~ resources
and the consequent added security for
loans, the rate of interest descands until,
as communities become practically alike
in circumstances. their rate Of interest is
identical. We all know the standing of
Minnesota financially. We know her
reputation in the money centers of the
country. We know that her people
should be able to borrow money at Q per
cent. That they cannot do this is owing
solely to the existence of this tax on
m ortgages.
The owner of a farm er q city lot de-
sires to raise a sum of money on his land,
He applies to a leaderof money in one
of these cites. The man who makes this
loan knows that he must pay a 2 fer
cent. tax on it to the state. Intending
to realize at least 6 per cent. on the in
vcstment, to which he is fully entitled,
he charges the borrower 8, to cover the
state tax on the mortgage. BY no posi-
biiity and under no circumstances is this
tax ever pnid by the lender. He is under
no c%ompulsioh. His money will not cat
itself up, though it lie idle for n time.
But the borrower is in no such easy sit
uation. His case is pressing. lie is
compelled to take the beet terils that he
can get.and those terms cover interest
his loan and the tax on the mortgage
in addltIalf. There then arises, farther,
the unjust Discrimination of which VIC
have spoken. If the lender be a citizen
of Minnesota, he is subject to her laws
and must pay this lax. If he bet citizen
of New York or ON other state, he is
beyond our Jurisdiction, and tie tax on
his mortgage cannot be collected. This
state law simply conGscates , per cent.
from the income of home capital, while
foreign capital escapes the tax alto
gether.
The result of this is TO keep the rate OF
interest in Minnesota artiiiciAlly ligh.
The New York capitalist is not ia the
business for philanthropy, lie knows
that the rate Of interest in Minnesots
should not be greater than 6 per cent,
because our credit aud Cur en-
title us TO that accommodation. He, or
his part, would be amply Satisfied with
9 per cent, since similar investments at
homa ,.appnt ha .,alo fnr .bo, rom O..
per cent. it would be but for the tax on
mortgages. But when he or his agen'
inquiries as to the ruling ratein this com
munity, he learns that it is s per cent. in
stead of6; because the home creditor
must receive that additional 9 per cent
to make himself whole under the stat,
law. The moneyed man of New Yori
does nc contemplate putting in his cap
ital anywhere at less than the prevailing
local rate. So he, too, asks 8 per cent
and gets 1t. where he would otherwise b.
satisfied with 6. The net result of .he
per cent. tax on mortgages. then, is Il
raise the interest rate over the entire com
Mpnity by 2 per cent, which enormou
tax is borne wholly by the unfortunat
debtor class; aud out Of the 8 per cen,
thus imposed arbitrarily by act
the home capitalist gets a net 6 per cent
and the foreign capitalist the entire sur
ihere mover was O more stupid an
harmful piece of folly than this, and GU
legislature, representing thousands Q
borrowers, ought to be able to see it b
this time. No act would confer create
benefit on Minnesota than the total re
peal Of the tax on mortgages.
AvaiuaD.e Hook.
We have on hand a limited number c
Dr.. Foote's Hand BOOTS or Heat