Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1901-05-25
.[AyON THEM0RTGAGE
Discussed at the Taxation Con.
ference by an Expert
from St. Louis.
OF WHAT A MoRrGAGoR COMPLAINS
Present System Does Not Reach the
Troublesome Iowa Tax Dodg-
ers i'm Danger.

Buffalo. Nav 2J.-The taxation con-
ference of the National Civil Fedora
tiOn resumed it's discussions OF the
question of taxation yesterday, the
topic being the taxation of mortgages
and inheritanceS and local option in
taxation. James \. Garfield, of Ohio,
presided. Frederick y. JudsOn. OF st.
Louis. the first speaker, spoke of taxa
tion of mortgages. JudsOn said in
part: The chaotic condition OF Amer
lean taxation in the now confessed fail
ure OF the general property tax can
not be better illustrated than in the
experience OF the states. especially the
recent experiences OF California and
Missouri. in the taxation of mortgaged
real estate.
Involves Double Taxation
Lands within the limits of a state
are subject to its taxing power and
cannot escape taxation. but the mort
cages upon real estate are represented
by notes or other securities which are
subject to be listed by the holder for
taxation at his domicile. like other
personal property. This theory OF the
general property tax involves double
taxation where it is effective-that is.
the taxation of both the property and
property. But it has failed to be effect
i've so far as the taxation of mortgages
is concerned. for the same reasons
that the taxation of all intangible per-
sonal property is Ineffective.
MortgagoT Has to Pay the Tax
"'It has been found impossible. GER
tainly in our cities. for the tax collec-
tor TO reach mortgaged notes or any
personal security, and with the eNcep-
tion OF the comparatively small
amount secured from administrations
and trustees, mortgages have prac-
tically gone untaXed. The result.
therefore, is to throw the entire bur
den upon the mortgagor. and the sense
OF injustice which he feels in being
required To pay - tax on the fun as
sessed value of his land. when its
value to him is reduced by the amount
of the mort gage. is intensified by the
recognized fact that the mortgage. as
rule. escapes taxation"
Comes to an Inevitable Conclusion.
After discussing the experiences OF
several states with various tax sys-
tens. Judson said: The inevitable con-
clusion is that land should be taxed
without reduction for mortgage liens
and that no attempt should be made
TO tax mortgages. 1t is idle to at
tempt equality in taxation by Il Sys-
TEN which is necessarily ineffective.
The real estate owner derives be1efit
from free competition of capital, In
that he can borrow at the lowest rate
OF interest. The holder OF real estate.
certainly in our cites. expects to re-
ceive a normal income on his property
after paying taxes.
Effective System Is Needed.
But the unfortunate holder of mort
cages or other personal securities who
is caught by the assessor In the pro-
bate court or elsewhere is from 10 To
GO per cent. 1t Is idle to expect that
such a tax can be collected under any
form of self-assesSment 1t is not
within the scope OF this paper to dis
cuss how the wealth invested in per-
sOnal securities and mortgages shall
be taxed. but certainly il should be by
an effective system. and it should be
the first requisite OF any rational syS-
tenn of taxation that the assessor should |
only assess what he can see and |
value"