St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1891-03-21
Yeas.

Craven, Leavitt, Nelson.
Daugherty, Lienau, Phillips,
Donnelly, Lommen. Sanborn,
Erickson, McHale. Stockton,
Geissel, Mcmillan, Wood-27.
This pronounced vote against him
staggered John Day Smith, who had
banked TO certain extent on the report
that the combine had been broken, and
he at once declared that he should offer
no more opposition to the measure eX-
cept TO vote against it, and by practi-
cally unanimous vote the majority re-
port was adopted. The bill was then.
under the suspension of the rules, given
its second reading, and will next appear
on the calendar for final passage.
The TaWney Mortgage Bill.
Special order, was Senate Files %, 276
and 527. Senator Donnelly'S measure to
tax mortgages, and Senator Tawney'S
substitute to prevent double taxation,
and also Mr.. Donnelly's proposed 1ail-
road and warehouse amendment. On
motion Of the Sage the consideration of
Senator Tawney'S substitute, which fol-
lows the Massachusetts law, and, if en-
acted, as it ought to be, will prevent
double taxation. was begun. Mr.. Don
nelly made the opening speech, saying:
There has existed for many years in this
state strong and earnest demand from the
agricultural population, that the double taxa
ton which prevails should cease. AS our
laws are now framed if farmer owns farm
thatis assessed for s., 900, and 1t is mortgaged
for $1,000, the farmer pays the tax on the
whole $1,000. and, under the usual contract
with the money lender, he pays also the tax
on the $1,000 of mortgage debt; so that farm,
worth $1,000, bears taxes upon 5000 of
property. II the money lender lives in the
county in which the land is situated. his
mortgage is listed for taxation, and he or the
farmer pays taxes upon ii; but ii the money
leEder lives i'll an adjoining county, or i'll
New York or elsewhere, the farmer pays the
entire tax and the money lender pays moth
ing. This bill proposes to change this. II pro-
videS that the $1,000 farm shall not pay taxes
on more than 5000, ard that, as provided
III the Massachusetts law, the interest of the
money lender shall be treated as real estate,
and he shall be joint owner with the bor-
rover. This is reasonable. The money
lender takes a deed for the farm-a condi-
tional deed, it is true-but conveyance of
the whole farm. The farmer has nothing left
but IL right to redeem the land. by the pay
ment OF certain sum of money. II he fails
to do so, the holder Of the title forecloses this
equity and clears the land of the borrowers
title.
This law leaves the parties the right to
make their own contract as to who shall pay
The taxes They have that right now l do not
think we could pass any law that would de-
prive them of that right. 1t may be said
then that this bill does not give the farmer
the relief he demands The difference is,
that now he has to pay taxes on ali the
farm and the mortgage besides. If this bill
passes he will only have to pay his OWL taxes
on such part of the value of the farm
as there may be above the sum total
of the mortgage, and he may, if he sees fit
agree to pay the taxes of the mortgage also
but he has the option to do; he is not COM
PEELED to do so. If he can find any one to
lend him the money at per cent, and pay
the taxes himself, he will not borrow it at
fl.ar.
him.
He was followed by Gen. Sanborn in
short speech against the bill. based,
in the main, on the grounds that it was
unconstitutional. In closing he moved
the indefinite poStponement of the
measure. As it was now past noon, the
senate took a recess till o'clock.
Senator TaVney's Exposition.
The afternoon session opened with
slim attendance of senators. although
the galleries were crowded, the impress
sion evidently having gone out that the
Sage of Nininger had returned from his
trip to Winnipeg, and might be depend
ed upon for a speech. Senator Hompe,
on calling the body 70 order, announced
that the pending question was upon the
motion of the senator from Ramsey.
Gen. Sanboln, to indefinitely postpone
all the measures upon the special order.
Mr.. Donnelly announced that the Sena-
tor from Winona desired to speak, and
the latter soon appeared and made a
carefully-prepared and able speech in
behalf of his measure. He said:
There has been considerable said about
the authorship of this bill" said Senator
Tawney. "and before l proceed to the discus
sion of its merits | desire to state few facts
for the information of the senators. When
senate files 80 and So were introduced by Mr.
Donnelly they were referred to the judiciary
committee. and by the latter referred to me
TO Investigate the subject to which they re-
lated, the first one relating to chaltel mort
cages. ! reported back to the committee rec
ommending its indefinite postponement. The
second one, relating to the taxation of mort
cages, | subsequently, reported with a state
ment of the law III Massachusetts, which
taxed the interest of the mortgagee in the
land. was then instructed by the commit
tee 10 prepare substitute for both bills and
report direct to the senate. l was also in
structed to incorporate provision in the
bill eXempting from taxation all mortgages
where the Indebtedness secured thereby
draws interest at the rate of per cent or
less. This, it was thought by the
committee. would enable the borrower
who had good security to get a
lower rate of interest and remove the induce
ment which citizens of our state now have TO
resort to fraud or perjury or to loan their
money in foreign state for the purpose of
evading taxation: so that in preparing ana
reporting the substitute was acting in ac-
cordance with the directions of the COM
mittee.
believe the bill is just one and should
become law. For many years the people
of this state, and especially the borrowing
class, have demanded relief from double tax
alton, but Notwithstanding this demand, no
attempt has ever been made 10 relieve the
people from this Gouble burden. The senior
senator from Ramsey says that taxing the
mortgage and the land secured thereby is not
double taxation; but IN this he Is certainly
in error. The mortgagor pays taxes on the
land described IN the mortgage. We all
know, as matter of general notoriety.
that almost universally by stipulation
between the parties. the mortgagor is re
quired TO pay the tax, both on the land and
the mortgage, and therefore he is twice taxed
on the same value. Many are the instances
in this state where the lender has gone to the
borrower TO negotiate loan. and in reply to
the demand or request for a lower rate OF in
terest the borrower was informed that on his
loan he would have TO pay tax, and but for
tnat fact he could give him the money at
lower rate, but because of that fact his profit
on the loan would thereby be diminished to
the extent of this tax, and to compensate
him for this loss the rate of inter in
creased TO the exteut of this tax.
buys farm for S1O,OO0. lie has but 5000
capital. But has 5000 which he is Will
ing to loan upon the condition that A
gives him a mortgage upon the farm A
borrows the money and pays for the
farm and gives b a mortgage for
5000. The farm represents $1,000
capital; no more. no less. OF this S500O.be-
longs to A, and 5000 belongs to =. But
when the tax lists are made out is assessed
on the whole amount of capital represented
by the mortgage held by him, viz, $1,000
That is. a and B are taxed on $4,000 when
they have but $4,000 capital; or, in other
Continued OH Sixth Page,