Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1897-07-29
TAXATION OF INVESTMENTS
The Adams Bill to Go Into Eff
feet on August LIST.
SOME OF THE ACTS PROVISIONS
What Are Excluded From Its
Operation.
Intent of the Law is to Make the Owner
and Investor of Capital Pay the Tax, but
in the Long Run This Burden Probably
Will Fall Upon the Person Who Borrows.

and Investor OF Capital Pay the Tax, but
in the Long Run This Burden Probably
Will Fall Upon the Person Who iiorrows.
fEThe Adams tax bill will 20 into
effect on August lst, and with that
date the taxation of Investments will
begin. All Investments paying interest
or yielding an income and which are
not now taxed for either State or
county purposes, or exempted from
taxation, are to be fasessed at three
fourths their cash value. The bill in
cludes the following as Investments:
"a II bonds for the payment OF money,
mortgages, stocks Of every kind, not
herein expressly excepted, all ludg-
ments, recognizanues and docreas for
the payment of money; all judgment
notes and certificates of Indebtedness
Except such as are given 10 good
faith for goods sold anu delivered, for
wages AMI such judgment note or other
evidence of indebtedness. as may be
given for short periods In the course of
business and NOT used or intended as
investments); all alienation bonds
bearing interest, or when the interest
ia included in the body thereof, all
interest bearing loans to any person.
firm. company, limited partnership.
bank, banking association and cor
poration of whatsoever kind, whether
doing business in the State or elae-
where. - s4
The following are excepted and ex-
cluded from tho operation of the act:
IAN loans and evidence of indebted
ness of the United States, Of tho State
| of Delaware or any of the counties
| thereof; of religious or benevolent
whose real estate is by law ex.
emnt, and of auch other securities as
are now exempt by express provisions
OF law: all loans which are made
| to local manufacturing companies I;
such companies, when their real estate
is expressly exempt by law; all stocks,
| bonds and mortgages in educational,
charitable, benevolent or cemetery
| institutions. whether incorporated or
not, and all Investments by savings
hanks and shares of building and loan
associations and investments made by
them.
The infant of the act is to tax the
owners and investors of capital and not
the borrowers or debtors and makes II
illegal for the owner and investor OF
capital to require the borrower to pay
the tax. Accordingly to bonds and
mortgages, judgment notes and GER
tificates of indebtedness an oath must
he attached in which the investor
swears that he has not required the
debtor to pay the tax levied on said
paper 10 advance. nor will he require
the debtor to pay taxes assessed or to
he assessed thereon during the exist
ence OF the debt.
The old provisions of law in relation
to the duties of assessors and of the
Levy Court in regard to assessments,
are applicable to the assessments under
this act. The court shall lay the taz
at the rate of 80 cents on each 500 o.
the assessment.
Notwithstanding the intent of thu
act is to make the owner and investor
of capital pay the tax, In the long rur
the borrower will probably have it tt
pay. And one way in which this il
likely TO come about is through an 10
crease in the rate of interest Thus o
late years money could be borrowed a
5 per cent interest and was plentiful a
that figure. But in view Of the fac
that the Adams tax bill will soon e.
into effect there ia tendency to al
increase in the rate. Investors VIII
now loan at 8 per cent, will when th
,, loan is paid, probably ask higher rat
i when reinvesting it. AS a result tn
, borrower will find money more ex
. pensive. Since per cent is the lega
.. rate of interest the investor cannot b
prevented getting as high rate as b
, may up to tina. point. The tendenc
made greater demand for 5 per con
y | Int ha IN,
,, willing to loan his money at that figur
I may have little difficulty to find boz
: rnwers. One attorney estimates a ris
in the rate of interest SO that in Me-
Castle county the total increase wi
: amount to the payment by borrowers Z
$40, 600 year more than before. An
this amount is probably in the neigh
horhood of what will be realized froi
the tax in this county
: What has been said about an II
: creased rate of interest applies only
Il New Castle county whereas in Ker
{ and Sussex the tax is more likely
/ fall upon the investor. The reason fl
a this is in the fact that the rate :
n interest charged there is alreAd
a usually per cent, the full legal raj
a and cannot, therefore. be increased
:, 1t has consequently been thought thi
II the act will not operate against tt
/. borrower there, whereas in this count
/, such is more likely to he the effect.
If AS to methods to avoid the paymel
of the tax one scheme was explaine
yesterday. In case of full loan, vii
narrow margin of equity, and wit
% interest in arrears. the mortgages asl
IT the mortgagor to transfer the title
q him and then makes an agreement thi
y upon the payment of the debt intere
i and taxes ION the property at tin
10 designated, he will reconvey II
q property. In the period allowed Il
/. borrower might be able to raise II
t, money to pay off the loan, and the il
r. weston having apparently no inyestme
a escapes the payment of the Adams ia
General william McKenney Dead.
Centrevlle, Md, July 23.-Ge
I'd William McKenney, the largest LAT
a owner of the Eastern Shore OF Mar