The San Francisco call., 1896-08-17
REALTY MARKET REVIEW.
Real Estate Dealers Talk About
the Mortgage Tax
Law.
THEY FAVOR ITS REPEAL.
Several Auction Sales to Be Held
This Week-Review of
the Records.
THEY FAVOR IT'S REPEAL.

+bousend dollars in the bank and which they
seem 10 prefer to invest in real estate rather
than allow it to remain in the bank. One or two
of the savings banks have given notice to their
depositors that the six months notice pro-
vided for by law must be given the bank be-
fore deposits can be withdrawn. This action
ON the part of the banks has created some un-
easiness among depositors and has prompted
the latter in number OF instances 10 seek oe-
sirable property in which to invest their
The repeal of the mortgage tax law, to which
allnsion was made last week, is generally
favored by real-estate men, as will be seen
from the following interviews:
A. S. Baldwin of the firm of Baldwin d Ham,
mond, when asked for his opinion OF the mat
ter, said:
it would have beneficial effect Npon the City and
state. II would bring outside capital here for in
vestment in loans, something that it is quite I'M
possible to get under present conditions. believe.
too, that it would materially reduce the rate OF IN
terest. AS matters now stand, while the lender
nominally pays the tax yet the ate OF interest is
always made high enough TO more than cover the
tax and leave a net interest of good proportions:
The uncertainty as to what the tax rate is going
to be each year makes lenders ask high enough
rate to insure themselves against loss, and, where
the taxes do not come up TO the point estimated oy
the lender, the borrower is loser. 1t is matter
of vast importance to the State, and the subject
should be taken up by real estate men and an ef-
fort made TO show the people the advantages that
would accrue from repeal OF the law
Spencer c. Buckbee of the firm of shainwald,
Buckbee Co., said:
Yes. L favor the repeal of the mortgage tax law
for a number of reasons. Parties who have money
TO loan real estate seek stability of value In The
security offered and stability in the rate OF in
is impossible to figure ex actly what the net re-
turns on mortgage loan Will be. No one can es-
innate accurately what the tax rate viii be from
year to year, and only local parties and institu-
tions will make loans here and they do IL because
they know the local conditlons ana can guess Det-
what taxes are liable to be from one year to an
other.
The removal of the mortgage tax would cause
large sums of Eastern and foreign capital to come
here for investment in loans. 1t would cause
competition in the loan business that would reduce
interest rates The borrower would thus be oene-
flied He pays the tax anyway indirectly, for the
interest rate is always made high enough 10 include
the tax, and if the lender guesses too high in
regard to the tax rate-and he will never guess too
low-the borrower is the loser
Gustav b. Umbsen of the firm of G. II. Umb-
sen d Co. expresses himself as follows:
certainly favor repeal of the mortgage tax
bringing outside capital TO ahis State-some ething
that we are much in need of for developing our
numerous resources. AS matters are at present il
is possible 10 obtain money for mortgage loans
only from people within our own state The re-
peal of the law would, in my opinion, reduce the
rates of interest," and in this we'll as many other
ways be of advantage to the borrower. The many
good reasons why the law should be repealed
any consideration, that little or no argument
should be required to induce majority of voters
to vote for the repeal of the law at the coming
election.
Will E. Fisher of the trm of VILE. Fisher &
Co. said:
I cannot express myself too emphaticaIly in
favor of the repeal of the mortgage tax law. Its
existence has been a drawback to our State and
has retarded the growth and development of this
City. We have built ourselves up TO the point we
are at simply from resources and without
the aid to any material extent, of outside capital
We have reason to be proud of that we have ac-
complished, to be sure, but think how much
greater would have been the progress Of San Fran
cisco and California if we had during all these
years had the aid Of outside capital in addition TO
know from my own experience, gain ed while
was East recently, that plenty OF money could pe
obtained there for loans on MORTGAGES here at 1a
TO 4 per cent, provided we did not have mort
gage-tax law. Borrowers in this City are paying
612 to per cent. The lender pays the tax which
did not until last year average much over l12 per
cent. Up in the country farmers can seldom OBJ
tain loans except from local banks, TO whom they
are Obliged pay g, 10 and as high II per cent
The tax the mortgage which the lender pays
amounts 10 but lit CO npared with what we pay
here in the City. If it not for the barrier OF
the mortgage-tax law farmers could obtain money
for almost half what they have to nay for it at
present. If California wants TO make more rapid
progress than she has made up to date, outside
capital must be had, and it can only be obtained
on loans by the repeal Of the mortgage-tax law.
Charles Spader, of the firm of Center &
Spader, had the following to say:
The mortgage tax law should, in my opinion, be
repealed, and until it is we need not hope to OBJ
tain money from outside the State to loan on real
estate. Eastern capitalists who have money to
loan are almost always willing to accept low
rate OF interest good loanS but they want to
know what their money is going to net them. and
they will not put it out with the attending un-
certainty that exists here as TO what rate a loan
will after the payment of the mortgage tax.
think borrowers would be benefited, for it would
in end reduce The rate of interest," particularly
on country loans,
A. NJ Speck of the firm of A. NJ. Speck & Co.
said:
have not given the matter extended considera-
ton, but far as have investigated believe the
repeal Of the mortgage-tax law would prove OF
m ha fv M m
outside capital to come in, and there is COM
petition even in money lending, such competition
ables them in many instances to obtain money at
lower rates than they could otherwise.
In an interview with H. D. Laurie and A ].
Carmany the managers of the California
Title Insurance and Trust Company, they both
expressed themselves as decidedly in favor OF
the repeal of the mortgage-tax law.
rhey stated that they knew from their own ex-
perience that it was impossible to obtain outside
capital TO loan on mortgages in this State so long
as the mortgagetax law is in existence They
said that the need of outside capital to aid in the
development of the State generally conceded,
and the mortgagetax law is barrier that will per-
petually exclude capital from the State so long
said law remains in force.
Mr. Harding, the attorney for this company, said
that he went East about two years ago for the
express purpose Of trying TO induce large financial
institutions place capital at the disposal of their
company for oaning on real estate in this State.
He found nearly all those he interviewed quite
willing to enter into arrangements with him, and
found that they willing to effect loans at 315
to 412 per cent, but as soon as he informed them
of the provisions OF the mortgage tax law, nego-
tiations were brought abruptly TO close and he
was unable TO find one individual or concern
willing invest single dollar in California the
shape Of mortgage loans under existing conditions.
REVIEW OF THE RECORDS.
There were 126 transfers recorded last week.
The number of mortgages recorded was
seventy-one, aggregating $159, ,203. The prin-
cipal loans, together with the security given,
were as follows:
By the Hibernia Bank, $4,000 for one year
at 615 per cent on property at the southeas t
corner of Page and Webs ter streets, east ~ IS
by south 137 IS; by the same, $4,000 for one
year al 61z per cent on the property on the
southwest line OF First street, 90 feet south of
Minna, southeast 25 by southwest rs, and by
the Mutual Savings Bank, $25, 900 for one year
at7 per cent on property on The south line of
Market street, 100 feet west of Third, west 25
by south 100.
Forty-four releases, aggregating $1S7, ,846,
were granted last week. The principal ones
were:
By the Golden Rule Building Association to
Sarah and Frank LOFTS, S11 900 on property
at thesoutheast corner OF Victor and Bryant
streets, east SO :3 bv south 275; by the Hiber-
MIA Bank TO Simon Kelly, $40, 600 on property
the southwest line of Fifth street, 80 feet
southeast of Stevenson, southeast 25 by south
west75; by the same to George Edwards, $751;
600 on property at the southwest corner of
HYDE and Ellis streets, south 1877 IS, west