Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1897-05-20
Proposed Ia. on Investments.

froposeu lax On Investments.
The bill proposing to tax Investments
was under consideration in the House
Of Representatives az Dover. Monday,
and during the discussion Mr.. Hazel
made the remark that the borrower
would have 10 pay the tax in every
instance, as long as the legal rate of
interest was six per cent" lie was
right, and he might have gone further
and added that the borrower would
have to pay the tax in every instance,
no matter what legal rate of interest
might be fixed by tho laws OF Della.
ware.
II anything has been demonstrated
by time and experience, it is that svery
imposition OF tax upon money loaned
for Investment inevitably falls upon
the borrower and not upon the lender.
1t is the latter whu makes the terms,
and not the former. The man who bor-
rows ia the necessitous party to the
transaction, and he IL is who must sub
NIT to terms, instead of making them.
When the State stops in and imposes
tax upon the money loaned, he must
pay it in addition to his interest and
principal. Even if all limit was re.
moved from interest rates. he would
pay it in the shape of increased in.
terest.
The State Of Delaware, az an or.
ganized government, bias vital interest
in this matter. The State has funded
debt, bearing interest at the rate Of
three and bsif and four per cent, and
this measure would impose tax upon
every citizen of Delaware having sumo
OF these bonds among his assets. The
result of such law would be that local
holders of State bonds would seek 10
get rid Of them, citizens would be
debarred from investing their money
at home. the credit of the State would
be impaired, and any subsequent issue
of bonds could not be floated at such
low rates OF interest.
1t has net been many years since the
State imposed tax upon bonds-ex-
cept it's own-and the city of Whining.
ton, in raising money by bond issues,
had to obligate itself to pay the State
tax, in addition to the interest. 1t ia
still within the memory of many people
when this was the case, and when
holders of city bonds received one
check for interest and another for the
amount of the State tax.
The State cannot hope to reverse the
natural conditions of trade and husi-
ness by law. When Investments arc
taxed, the borrower must pay that tax
or capital will seek other localities for
investment This is 30 plain that il
is strange that anyone should seek ia
controvert it. Even the trainers OF
the pending bill practically admitted
this by placing in the measure pro.
vision requiring each holder of mort.
gage to take oath that in the payment
ct the tax he was not exacting it of the
creditor in any manner. In this case,
there ia only one alternatiye-the Lender
will not lend, and the parties in neec
Of money will suffer. The State, ii
the end, will gst no revenue, and vii
only have the satisfaction of knowing
that grievous burden has been i'm
posed upon the people, and capita
driven out of the community.
When rates of interest are as low a,
they are now, and have been for years.
and large, stable loans can be hoatet
for less than three per cent interest, i
is idle to talk about taxing such invest
ments. A tax would maks thom I'm
profitable, and then only trouble woull
ensue. The holders would soon arrang
that the State should got no revenu,
from this source.
The bill should be killed. 1t is no
in the interest of anyone, not oven U
the State. 1t would not pruduc
revenue, aud it might cause no end o
trouble and infiict great loss upon tn
people.