Mexico weekly ledger., 1901-01-24
THIRD AMENDMENT
A Letter Frcn q Prominent Lawyer
in California in Referees 10 This
Mater.

Not long sgo the editor o. the Meu-
iosLDsKE vrUie to Waiter Murray,
formerly q Mexico iHrefdenoe 70 the
working Of the Mortgage Tar Law in
iClhUmia. EhichiSsinlaFt 10 The Third
lOouSitutioaal Amendment in Ms
souri, Mr.. Murray turned the letter
over 70 a lawyer o. san Jose 70 answer
and the Glowing Communication from
tat gentleman explains itself;
70 TIE Eator q the Le6Eer
SAN JOSE Cal Jan a-Dear SiE
Your letter u November - 1900, %
Walter Murray, Esq, q this eity, gas
handed 70 ne with the request that !
answer the sane Yoa ask qDestionS
conceming taI ca mortgages and !
viii attempt 70 answer jour questions
in the order that you asked them
FInt is il good for the borrow
err ] do not think So The lender.
increases the nate Of interest 50 that
the borrower Pys the net rate the
lender wants plus the amount ieti
mated Of the taxes The lender die
tates terms II the amount added %.
the net rate wanted By the lender was
exactly the amount q the taxes and
the amount q the mortgage was no.
more than the assessed Valuation o.
the property covered b. the mortgage,
then the mortgage tax would not bene-
IT or detriment either borrower OF
Lender. But IL the tax rate is scents
T7s cents OF 81 cents On the 800 the
lender viii usually add respectively, 7
2 O. q per cent 70 the rate q interest
be vzntSnet On his money, which you.
see is not foT the benefit q the borrow
er, but for the lender; and If the oan-
if perfected before the tax ateiS fixed,
then. Of course, the lender viii put his
estimated tar rate high enough 10
cover all possible rate levied By the
tar powers Again, if the amount Of
the mortgage exceeds the ASSESSED
valuation Of the property mortgsged,
the borrower Is the l0SL II the
property moTtgzged IS assessed say al
5000, and the mortgage on the sane
is in the amount q $3.50, il the
mortgage was not taxed the borrower
would only have TO pay a tax On the
property, which is assessed at sl.0o0
but as the mortgage is taxed, the Dor
rover is compelled to pay a tax on the
mortgage-sl500, which makes his
taxes 80 per cent higher than they
would be were the mortgage not taxes
In this case the deuiment IS to the
borrower, and the state is benefited
and the lender is not affected at all
And IL the mortgage is In amount less
than the assessed valuation u the
property ~cOyerered by the same, the
amount Of the mortgage is S~ubtracted
from the amount Of the assessed yalu-
alton, and the borrower has t0pay tax
Of the difference. Thus the borrower
Is not in any way benefited, but is
often ~burdened, and the lender is not
affected and the state alone is some
times benefited. For The above
reasons ! do not believe that a Mort
gage Tax is a good thing for the Dor
rover. / see that my answe TO your
frst question has also answered your
second question, which is, did IL
raise the rate on interestgn
j will answer your third question
What Is the rate Of interest In Cali
fomia:" The legal rate Of interest in
California is per cent, but any rate
can be fixed BY agreement
Fourth. does it keep foreign capi-
Sb6ut Of the slater" No.
Fifth. "When a mortgage is taxed
on real property in California, is it
taxed as personal property where the
man lives who loans it 70 you:r am
inclined to believe that there is some
mistake in the form if this question
for one state has nothing to do with
the taxing Of property in anOther state.
| think, however, that / understand
the import Of the question and viii
answer it accordingly. The tax on the
mortgage charged OF taxed to the
holder Of the mOrtgage-record holder
Of the mortgage-bHt the property is
chargeable with the mortgage tax
levied thereon, and if the holder Of the
mortgage does not pay the tax on his
mortgage the owner Of the property
must do 50.
1t is my humble opinion, the tax on
mortgages is an attempt to put the
burden on the lender and is a failure,
for 1t does not do 50.
Hoping that the above may be Of
some little benefit 70 you, / am.
Yours most respectfully,
CHAs. II. HOGe.