Mexico weekly ledger., 1900-12-20
III THIRD A-mRxDxrxr.
Lee A EsConasn Fsrzsziy of Msxi.
g. strs1gg uisapprsyss tie Mort
gsgs I&E.


Lee A. Moo0anSa furmerly a prs-ui
nent druggist u Mexic0 now IA n.
nal estate business In Los Anrel@
Cal, writes the LEDsnR a letter dis
approving the Third Constitutions
Amendmon1 Jasz p1Ssed in Mexico
whhh s the sane IS the NortgaEs
Tax Law q ClifovniA he letter !:
Is follows
= tAe h1aref Ne 1sarer
Los ASeEaE CAL Dec lk-neal
sir Referring r. yOnr conmmica,
tt0n of Nor. - regarding the Mort.
gage Tax Law q Gliforna, you ash
first IS II agced thing for the Dor.
rOwers No II it IS not. ItisatrOa6ls
to both morteagur and Rortezeee
Second Did Il raise the rate Of
INTEREST," Yes the rate was uaised 4
fraction Of che per cent more than the
rate q TAXATION.
Third In southern California TIE
nate varies from Six per cent net mine
per cent groSsl on gilt edged security
to s per cent net, or II per cent gross.
One illustration Of the unp0pulArity
q this Law with borrowers is the fact
that nearly every borrower wants to
arrange with the lender to permit the
borrower to pay the mortgage tax and
get the money az what We call a metz
rate Of interest To illustrate: The
rate o. TAXATION in LosAngeles county
for ten yeaH has averaged 81 per cent
II the commercial rate for money IS :
per cent the lender adds ) per cent TO
cover any possible tax rate. and loans
On real estate at 10 per cent The
borrower arTangeS with the lender 10
draw the mortgage at 10 per cent TO
accept interest at the rate Of : per
cent net levade the laWl and receipt
only On account; then at the end OF
the year the borrower pays the mort
gage tax and presents his receipts
receiving a receipt In full for interest
II money is scarce the lender refuses
10 make a net arrangement and then
the borrower pays the higher rate.
This provision was passed by eonsti-
tutiOnzl convention, controlled BY
farmers and working men.
Its repeal has been opposed BY say-
ings hanks and moneyed interests, who
want to keep up interest rates. and
keep foreign capital out. The savings
banks are benefited in that they
make from ! to . per cent of the mort
when the gross rate is made, but
in I6 loans out Of 3othere is an evasion
Of the law, and the net rate is agreed
upon, and the following agreement or
memorandum is signed by the mort
gage:
"For a valuable consideration, /,
the undersigned, hereby promise and
agree to give credit III per cent OF
the - per cent interest on the mort
gage note in the principal sum of
-, signed by -, in my favor
Of date -, IS, provided said
pays all taxes and assessments
levied against the property covered by
the mortgage securing said note and
upon said mortgage and the debt Sc
cured thereby during the continuance
u said note unpaid, and presents to
the undersigned proper Official receipts
showing such payment; said payment
to be made before any such taxes or
Assessments respectively become de
linquent. This is In no wise TO be con-
sidered as IN agreement binding said
topay said taxes or assessments,
but Is only a right or privilege which
said debtor can exercise or not at his
option"
In the fifteen years In which / have
been actively engaged in the real
estate and loan business in Los Ange-
les, Cal, / have found this mortgage
tax law TO be a nuisance and a burden
TO the state, causing unnecessary COM
plications and trouble to the tax col
lector, the agent negotiating the loan,
and in brief, to all parties concerned
The law never has given satisfaction
in this state.
Friend White, they tell me the
LEDGER is more prosperous than ever
before, and if you find you have a sur
plus accommodating, upon which you do
not care TO pay a mortgage tax, send it
out and we will invest the same in
and oil stock. Wishing you I'M
bounded prosperity, l am, your friend,
LEE A. MCCONNELL,
las South Broadway,
Los Angeles, Cal.