Telegram-herald. ([Grand Rapids, Mich.) 18??-1892, 1891-06-23

One OF the difficulties n our system
of taxation, which the "reiormeTs"
promised to dIspose Of and adjust 81
the present session of the Legislature,
- ghs TAXATION OF mortgages aud mort
gagged property. The time when ia all
ceceney the Legislature should adj
Journ Is now very near, and yet moth
ing has been heard OF tho subject.
Even the Kent statesman, who wept
aud sympathized with the mortgagrd
farmers al through the campaign and
promised 10 bring his ponderoas
"thlnk-tank" 10 bear on the problem
aud remove II from the field or legisls-
ton forever, has apparently lapsed
into fOFgetfuiness or indlffereace on
the subject. Ii is no easy question 10
settle, as the TELEGRAM HERALD has
Oftea remarked and demonstrated and
If the Legislature IS to adjust it. some
show OF beginning should soon be
made.
our present law taxes mortgages, but
they had very generally escaped the
eyes of the assessing officers until the
law OF 1887 was passed, which un-
earthed them more successfully. That
lam served one useful purpose. which
is friends, perhaps, did not contem-
plate. /, showed pretty clearly the eff
feet of mortgage taxation and brought
prominently before the people for con-
sIderation the equities Of the system.
Whether men who had their money IN
vested in that species of property ought
20 be exempt from the burden of taxa
ton and, II not, how to reach therl;
whether the owner of mortgsged real
estate should have the value OF his
mortgage deducted from his assessment
and. II so, how best TO adjust the rela-
tive interests Of the mortgagor. the
mortgage and the publc-these were
serious problems presented for public
discussion with a startling persistence.
AS a natural consequence, wide diver
gences of opinion sprang up at once.
The effects of the law of 1887 seem
TO have been we'll comprehended and
demonstrated by the Chicago Herald in
a recent article. After reviewing the
question 1t says that two things
have been demonstrated: First, that
on new evidences of debt. the mort
gagor pays the tax, when it is
paid at all. II Is paid under the Michi-
gan law IN cases where the mortgage
lives IN the state. In cases where he
lives outside of the State, the tax is not
paid. The Michigan collector cannot
get tax out of nonresident lender;
the law does not require him to ac
compIish the feat. The tax is collected
from the resident lender. but on new
loans he collects enough from the
borrower to cover the tar. Second.
that residents of the state who
have money to lend on mortgage secur-
ity lend 1t IN other states, aud not in
Michigan. Residents of other states
can lend IN Michi gan and avoid the tax.
Therefore, they can afford to lend at
over rates than can residents who arc
reached BY the taxing machinery. But
the latter can take their money
to other states where they can
loan Il and not be reached.
The upshot of all tina il. according to
the Herald. that tae supply Of loanable
capital IN the state IS diminished and
the rate of interest IS increased. The
rate - increased for two reasons: First,
because there ia less loanabls capital
and less competition among lenders;
and, second, because lenders will not
make 50 favorable terms away from
home as they will at home. where they
can form their own judgment ss 10 the
security offered without iru ting to
sgents, and where they can save COM
missions.
And yet this great and pulling ques-
ton Is likely TO remain with Us another
two years. The tax bill has only Just
been reported into the House and it is
now too late IN the session TO give so
important a measure adequate consid-
Grafton. IL anything IS presented TO
meet the emergency Il will be some I'M
a gested plan which Will cause more
troubles than il will remove 30 much
for Democratic promises of "reform."