The record-union., 1894-12-13
STATE BOARD OF EQUALIZATION.
It Has Filed Its Report With the
Governor.
recommendation Tor Changes in the
Revenue STANDARDIZATION
of Mortgages.

The State Board of Equalization has
filed its report of proceedings for the past
year with Governor Markham, in ac-
cordance with the law
1t states that the Political Code pro-
vides that the Board of Equalization re-
port to the Governor such suggestions as
1t may deem proper. in addition to the
taoulated statement of property, and it
has been customary to do so in regard TO
reforms OF revenue laws, but although
the attention Of the Legislature has often
been called to it by the Executive Depart
Inent, it has not received the attention its
importance demands, and many sections
that have been pronounced unconsttu-
tonal by the Supreme Court have not
been repealed Except in such decisions),
and still remain on the books TO raise Il
doubt in the mind of the officer Affected
thereby.
1t suggests that the whole of or as much
OF The law as relates to revenue be re-
vised, and that the Legislature appoint
! commission TO examine the system and
report such changes as Will conform to
the Constitution, the decisions OF The
| courts, and the changed condition of the
| State.
FALL IN VALUES.
! The increased assessment OF property
! has been maintained till the past two
years, but the low price of farm produce
has reduced country real estate values 10
an alarming extent, from which the as
| sessment rolls VIII take years TO recover.
RLAssESSMENT.
When the board came to reassess the
railroads it asked the opinion OF the At
! torney- 1t recites his opinion
! ana the action taken III regard to reas-
sessment for 1856 and 1857. IL says: "If
the board did not reassess Al this time.
! the State would have to do without the
use OF the money Tor an indefinite period
We have avoided the hap-haZ-
ard, prejuGiced and reck kless manner in
which Iormer assess mentS were made,
| but were not paid on account OF their eX-
cessive and oppressive valuations, and
/ the result Is that this veSed question, and
| source OF expensive, Improbable and
! unsuccessful litigation to the State has
| been disposed OF, and there has been, or
| viii be when the second instalIment, due
III April, 1898. is paid, the sum oil 81 ,30S-
! oo9 pald into the treasury OF the Stale and
| the various counties iutereSi ed This
largo sum, together with the taxes for the
railroads for 1884, coming at Il time of um-
usual financial slrIngency, has helped to
| Tighten the burden OF taxation very ma
! terially."
| PROPERTY SOLD FOR TAXES.
| The board calls attention to The sugges-
! ton made in 1896 with regard to prop
erty sold 10 the State for taxes and thinks
| the whole matter should be under the
| control Of the Controller, VINO should di-
| rect the County Treasurer to sell the land
| to whonsoever, not the original owner
will pay the taxes for two years and
costs. The original owner can redeem
! under another law.
LOANING MONEY.
Several Of the State institutions. nota-
! bly, the state University, loan money on
mortgages These mortgages, by a de-
| cision OF the Supreme Court, are de-
! Quoted from the value of the property,
| but are not subject To taxation, conse-
| quently about three-qudrterS o. Il million
dollars worth of property is Withdrawn
! from taxation. The board thinks the
| method places the State in competition
| with the banks, disturbs the revenue sys-
! tenn OF the State and the various counties
and introduces an inequality between the
counties in respect TO the burden Of taxa
| ton.
TAXATION OF MORTGAGES.
| 1t recites the decision of the Supreme
! Court III 1876 that mortgages were not
! taxable property and the provision OF The
| new Constitution for their taxation,
and the expedient for avoiding
| double taxation. The system, IL
states, has utterly failed to ACCOMPLISH
| its purpose, but on the contrary, has
added TO the burden of the borrower 1t
has not iultilled the expectations of it's
! devlsers, that 1t would relieve the bor-
! rover from so much taxation and cast
! the burden OF the taxation OF the credit
! upon the lender. On tho contrary, the
taxation OF the mortgage is cast on the
! borrower, and in addition ho pays a
! higher rate of taxation in the share OF
! interest than he would if the mortgage
was not assessed. The lender increases
/ the rate OF interest by the rate of taxa
| ton, adding little more IN anticipation
of an Increased rate of taxation, and per-
hapS adds half per cent. more to make
! the rate an even one, aud avoid fractions,
! but II the rate declines, the borrower re-
| celveS no benefit from il. lie must nav
according to the bond, while State taxa
ton has been declining for lhe past five
years.
! The rate of State taxation has decreased
from II cents in 1889 10 5S cents in 1880.
| 10 cents in 1891 and 43 cents in 1892. but
! the borrower receives no benefit from IT,
! ne sum o. money unrighteously wrung
from struggling debtors each year is, The
! report says, amazingly large. In
every loan not less than one
! half per cent. is added for
contingencies after the assumed rate
OF taxation is added to the really accept
aule interest. The mortgage assessment
! for lS9Z amounted to Sl94 l2o, ,095. The
/ one-nalI per ceu: of this sum amounted
10 S91U,6zo. The eXaction Of this money
l. simply lesal!Zed robbery. suppose
| iGrther, that The assess Inont Of mortgages
! Continues III 1882 1880, 1851 anu 1872 TO be
3lSkl-o,UJ0? The II cents estimated for
! the taxes III 1889 and paid by the mort
| gdgcrS as Interest and supposed TO be
, PAID Dy the mortgages to the State as
| taxes upon The mortgages amount to
! SI,oit, 10. This sum continues for the
! following years 10 be paid by the mort
! gagors, but III 1870 the tax is only 81 ,0O9,
0UU, a clear loss to mortgagors, and
a gain TO the mortgages Of S5J4 rs. In
1871 a loss and gain OF SOL, 100, and in
! lo9Z a loss and gain of S6oO, ,020.
IN many cases mortgaged property is
reduced IN the assessment below the
true value OF The mortgage and the
mortgagee only pays on the reduced
! value, While the borrower pays the tuIl
amount OF the taxes estimated AS interest
III mortgage Is given after the Iirst Mon
day IN March the Inortgagee pays no
taxes tor that year, while the morLgagor
pay lax III the iDrtn OF added interest
lie cost of assessment ana taxation Of
! mortgages Is also enormous
The board appeals to the commonsense
2f the people OF the State, who are suffer-
ing from Seif-Inposed burden throl1gh h
the Legislature, TO submit an amendment
| to the Constitution TO exempt MORTGAGES
and deeds OF trust from taxation.
|