Sturgis advertiser. (Sturgis, Dakota [S.D.]) 1887-1???, 1891-03-12
STURGIS ADVERTISER.
TAXING MORTGAGES.

TAAlNG MORTGAGE6.
A bill imposing tax on mortgages
became law in South Dakota at the
session just closed. The wisdom Of such
a measure is questionable, for more rea-
sons than one. The object of this law
is to compel capitalists to pay tax
upon all investments. All will agree
that is right, but the borrower may find,
to his sorrow when it is too late, that he
foots the bill by paying a higher rate Of
interest than has heretofore prevailed in
this state.
Capital is very shy at best, and I'M
favorable legislation too frequently
works hardships upon the class Of people
that are intended to be benefited. The
Pierre Capital gives the public the facts
as they exist in California, where this
law has been fully tested, towit:
Last August George G.. Crosse wrote
the secretary Of the board of equalization
in California asking for information as
to the results of taxing mortgages. It
was well known fact that Mr.. Crosse
was an earnest advocate of a law to tax
mortgages in this state hence he would
naturally seek information to strengthen
his views. Below are given extracts
from the answer sent Mr.. Crosse by the
secretary of that board:
"Taxation of mortgages does not add
one dollar to the revenue of the state"
This is the testimony of one who has
seen the matter tested. He is in posi-
ton to know all the facts in the case.
He continues: "Any farmer would
laugh at the proposition that the more
il costs to raise bushel Of wheat or the
more it was taxed, the less would be the
price of it in the market. And yet the
farmers in this state G5aifiiffornia really
expected that the more taxation placed
upon money the less would be the inter-
est thereon.
s'The mortgage tax in this state is a
detriment to the farmer. Most of the
money borrowed is from the banks.
Taxing mortgages introduces inequality
in taxation. The mortgage is an indica-
ton of the value of the land and the as
SCISSOR is governed by it. One of two
things ensnes: We assess property, il
mortgaged, higher than property Of
equal value not mortgaged, or where the
assessment is below the actual value as
many times happens, the mortgage is
scaled down to the value of the property
and the mortgage pays less taxation
on his mortgage while the borrower ii
the shape of interest, pays tax on prop.
erty which the MORTGAGE does not pay
Property is not assessed at over 70 pei
cent of its value while mortgages are as
sessed at full value. Farmers who are
the largest borrowers thus place bur
den on their own shoulders by taxing
mortgages.
sit does not require any abstract rea
soning to understand the mortgage ques
ton. If A has farm worth $4,000
and B has $4,000 in cash it is clear tina
there is only $4,000 in existence. If il
your state you tax the farmer and thu
money and the loan that B makes to A
you tax $4,000 value that does not exist
and compel A to pay the tax on thu
$4,000, while you violate the simpies
law of political economy and a law So
violated like all laws enforces the pen
atty.
ssIf in this state, as we do, we tax th
sum of the property towit the $4,000 o
mortgagor and mortgage and tn
So, 900 cash to the possessor A, we onl.
assess the actual property, but A pay
the whole tax because B adds the tax t,
the rate of interest he exacts. On tn
whole our experiences are against TIN
assessment of mortgages"
That western securities are not as de
sirable at present as they were year
ago, is shown in the following para
graph an extract from letter writte
to Messrs. Davenport & Hoehn of Stur
gis by A. W. Wagnalls OF New York
who has large amount Of none,
loaned upon South Dakota lands-towit
I dare not extend maturing loans
Yoa will do your customers favor b
notifying them in time to look elsewher
to borrow, and they will be gamers
/ they do SO, as from all I can see rate
must advance in the west, especially 8
/ il the alliance movement develops as
looks today in Kansas. Soon in tia
state no money can be had at almos
any price on mortgages if the extrem
notions prevail.
\ THE FARMER LEGISLATURES.
/ The western Legislatures have abou
Il &. 49,