New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1900-01-28
MORTGAGE TAX OPPOSED.
REAL ESTATE MEN THINK THE STRAN-
ARAN BILL A BAD MEASURE.
THEY PREDICT ADDED BURDENS UPON
REAL ESTATE, THE PRINCIPAL PART
OF WHICH WOULD BE IN
THIS CITY.

sultant share of evil following an equal share of
good has been strikingy illustrated in the of
interests of this city. Brokers.
and those who generally interested In prop
erty IN the form of realty have for long time
been deploring a depression which neither logi-
cal ineligible in the face of the generally i'm
proved condition of financial and commercial af-
fairs. With money apparently plentiful and bust
ness of all kinds booming there was yet no strong
evidence that the buying of real estate had reverted
TO conditions that justified any great hope of an
investment movement of any satisfactory proper
lions Some business was transacted, as is always
the case and in certain lines fair degree of ac-
tivity developed But on the whole real estate
for some time has lacked the quality of sustained
strength that might have been looked for in the
face Of all other conditions making for prosperity.
The announcement that after long delays rapid
transit practically assured in the awarding
OF the contract generally accepted by real
estate men in a spirit of thankfuness and con-
gratuatons went up and down Liberty-st. and
IN and Of the Offices of the real estate brokers'
agents and owners. The spirit of optimism that
'ensued had hardly time to become general, how
ever before these found themselves facing
another proposition. which general opinion among
them seems to believe will prove disastrous to
their business rapid transit may prove bene-
fetal.
Since the introduction of Senator Stranahans
bill in the Legislature proposing a of five mills
on real estate mortgages, that subject has taken
precedence of all others in discussions among
brokers. They generally conservative in
talking for publication until they had given the
subject considerable thought, but their opinions
are pretty generally crystallized into pro-
nounced opposition to the measure. The bill is
said by many of them TO be only another attempt
TO make the of realty bear the burden of
taxation, and there is a tendency to look upon it
measure backed by persons who have not the
best interests of the city heart and of the kind
with which New-York has had to deal before.
incidentally II may be added that real estate men
do not look for the bill to become a law.
a-rr-
It is pointed out that similar measure intro
duced in 1888 failed to pass, although It had been
favorably reported to the House by the committee
10 which it had been referred. The former bill
did not fix rate. but specified that mortgages
should be taxed Two principal objections to the
bill have found expression One is that the tax
viii eventually fall upon the borrower mort
gageor and thereby become additional tax on
real estate instead of a relief. Again, it is held
that the machinery for ascertaining the property
and assessing the tax VIII be power for evil 1t
As generally agreed that if the bill becomes law
the mortgageor will simply have to pay add
tional one-haf per cent. The suggestion that this
will be Offset by a reduction Of taxes his prop
erty equal to the amount that goes to the
State is not accepted in a spirit of absolute faith
by real estate They incline rather to the
belief that their municipal taxes will remain the
same, and they point out the fact that with
Tammany administration the expenditure is pretty
apt TO be in the direct ratio of the money avail
able. So far a any indirect benefit is concerned
the real estate fraternity to be of the gen
eral opinion that there be So far
direct injury is concerned they decidedly in
cned to view it such Briefly, they say that
1T will impose double taxation the owners of
realty Real estate. they say, is already assessed
10 practically its full value and by making the
znortgageor pay five mills additional extra bur-
den will be imposed That the mortgageor will
have TO pay it is taken to be almost automatic.
Even If there were to be lowering of the
equal to the amount that goes to the State 1t is
held unincumbered ight
nortgaged real estate would be benefited. while
heavily mortgaged property would lose by the
change.
AN ARGUMENT IN FAVOR OF THE BILL
While the opinion of the majority of real estate
men who were against the new BILL it is
only fair to cite argument in its favor that was
heard 1t was said that the would discourage
indscriminate building operations by men who
have no capital and who enter into such operations
without the means to carry them through. The
tax by discouraging such operatfons would
reduce the number of foreclosure suits and thereby
prove benefit generally In answer to this, the
argument OF prominent broker may be cited who
Enie acknowledging that there some builders
who ought TO be discouraged, expressed the belief
that they were by no means many as to Justify
legislation which would be a hardship to all 1t
was pointed out that the upbuding of the city has
largely been due TO men who, without the necessary
capital, have brought to bear energy and brains
which took its place. Such men, it is thought will
be seriously handicapped by any additional tsx
bearing
winch has been anticipated from rapid transit one
Of the chief complaints that had been heard from
time 10 time from real estate men as the prospect
Tor rapid transit was pushed further and further
into the future, was the fact that with desirable
property at their command they were unable to
Interest buyers, who deferred from investing
In the outlying sections of the city on account of
the lack of transit facilities. Instead they went
into the Jersey suburbs. Now that the transit
question has been satisfactorily settled they saw
II Is pity that the tax question will again make
for exactly the same Objectionable exodus 1t will
they say, tend to discourage the building of homes
here by the middle classes. Most Of these homes
are built with q small initial payment the balance
being advanced to the occupant bond and mort
gage at a low rate of interest Those people will
be the ones who will have pay the additional
five mills taxed on mortgages, and not the mort
gagees In case the bill goes through they will no
longer be able 10 get loans at the present rate of
interest for the lenders of money Will quite natu-
rally increase the rate, to include the tax
The effect will be that thrifty persons will
build in Jersey. where such burdens will not fall on
them.
That the effects of the tax would be immedi-
ate there is no reason to doubt Brokers who have
been seen about it in the last few days say that
they have already felt it. Several were men,
toned where it was insisted that clause should
De inserted In the mortgage by which the mort
gageor agrees TO pay the additional five mills II the
bill becomes law. Other instances were cited
where money is being withheld until the matter
is settled one way or the other. 1t is pointed
1hat about 30 per cent Of the real estate in New
York City is mortgaged. A large number of these
mortgages-possibly half-are overdue and II the
measure 10 tax them becomes a law practically
all these loans would be called in and renewed
only at higher rates and additional expense TO
the owner and borrower
TRIAL OF A LAW IN MARYLAND