The Vermont watchman. [volume] (Montpelier, Vt.) 1883-1911, 1896-11-11

rendering this arrangement operative,
and for compelling compliance on the
part of the MORTGAGE.
If the law could build a Chinese wall
around the parties TO the proposed COT
tract, the chances of negotiating it, and
carrying out its provisions in their
strict letter and spirit, might be in
creased. The money.lender, if be
loaned lis money at all, might then be
compelled to loan it to the borrower on
the conditions the law establishes. But
there is absolute free trade Ill money.
The market for its employment is
world wide, aud, like any other com
modify, it will seek the best market. If
the market prize Of money is six per
cent per annum on mortgages oil real
estate, the money-lender will exact s x
per cent, just as the Vermont farmer
will exact the current market price for
his butter. If there is tax Of two
cents pound on butter sold in Boston,
and the sale is free in New York, the
farmer will send his product to the lat
ter ci y unless the Boston dealer shall
pay the tax. If the rate of taxation in
a neighboring town is two dollars on
dollar of the grand list, the rate of in
terest to the money-lender in that town
would be reduced two per cent. What
will be the inducement to outside capt.
tai to enter that town? The same that
the Boston marke tman will offer the
Vermont dairyman if he wants his but
ter-that the borrower she'll pay the
tax. The resident money-lender also
will be similarly recouped, or he will
send his money out of town for invest
ment. The only way to defeat an
agreement between the borrower and
the lender that the former shall pay the
tax, is to deny the right to contract, or
to violate the general law against i'm
pairing the validity of contracts.
We believe, if this question is ex-
amined in all its bearings, the farmers
in particular, for whose advantage the
proposed law is asked, will be the first
to pray for deliverance from so great
misfortune. Whatever may be the
hardships of the honest mortgageor un-
der the existing law that taxes both the
mortgage and the mortgaged real estate
at their full value in money, those
bardships would be greatly increased
under the operation of law such as
is contemplated by House bill No. 55.
The practical operation of the bill, if it
should become law, would be that the
borrower would agree to pay the tax on
the mortgage, or he would not get the
loan. The money-lender would thus be
exempted frem taxation, and the mort
gageor, who ought to be exempted if
anybody is, would pay the taxes on the
full taxable value of the mortgaged
property, and, in addition thereto, his
share of the increase of taxation rem
dered necessary by the practical ex-
emption of the money-lender. Under
the operation of the mortgage exemp-
ton act of 1881, in Massachusetts,
$40, 900 900 of capital escapes taxa ion,
and the burdens of taxation, in that
state, which fall most heavily on the
farmers, are thereby increased about a
round million. The Massachusetts
pleaded the miseries of
the rowing class so effectively be-
fore The legislature of 1880, that that
body turned round and exempted from
whom? The money-lender
And the money-lender made
haste to clinch the advantage he had
gained through copious showers of
crocodile tears, by putting into the
body of every mortgage condition
that the mortgageor should pay all the
taxes-his own and the mortgagee's-
on the mortgaged property, and, in the
event of the repeal of the law, should
pay the tax on the full taxable valua-
ton of the mortgaged property, and the
mortgage also. Committees of success
sive legislatures have reported in favor
of the repeal of this law, but 30 great is
the clientsge the money-lenders have
built up by the insertion Of this clause
in the mortgage, that the legislature has
yielded to the combined influence of
the powerful lobby of the money
lenders and the prayers of the mort
gageors who have been entrapped by the
condition that binds them to the tax
rack TO save them from the ruin repeal
would bring, and the law still stands.
1t has moi lowered the rate of interest
on mortgages. The rate has not de-
clined az rapidly since as it did before
the passage of the law, nor to 80 great
an extent as the rate on every other
kind of security.