Vilas County news. [volume] (Eagle River, Vilas County, Wis.) 1896-1927, 1902-06-09
THE FROST MORTGAGE Bill VETO.
LA FOLLETTES RESPONSIBILITY FOR THE SITUATE
THAT IS EMBARRASSING BOTH BORROWERS
AND LENDERS


The. small borrowers and lenders of the
state have suddenly been brought face to
face with the fact that the taxation Of
mortgages has become a serious matter IN
Wisconsin. Those who are depending for
a livelihood upon the income of the saw
ings of a lifetime have discovered that
their revenues will be largely eaten up by
taxes, and those who are forced to borrow
in small amounts find themselves called
upon to pay increased rates of interest,
if not direct in the form of commissions"
The responsibility for this state of affairs
rests with Governor La Follette.t1
The friends of the governor, recognizing
that his veto of the Frost Mortgage Bill
places the responsibility upon him.. have
undertaken to Justify his action in that
puerile publication known as the Voters
Handbook They print the governors
veto of the bill and then attempt to JUS
tify it by recording the fact that~only an
insurance agent and a banker voted to
pass the bill over the governors veto.
The Handbook neglects to state that there
were only twenty members out of one
hundred present when the vote on the
veto was taken.
The story of the attempt on the part of
Assemblyman Frost of Portgage county to
enact legislation which would tend to solve
the vexatious mortgage taxation problem;
and of the defeat of hisTbill at the hands
of Governor La Toilette, makes intensely
interesting reading, and still further dis
closes the true characteristics of our great
reform" governor >''| ~ ::
Mr.. Fred j. Frost, whose home is at
Almond little village in Portage county,
is a student of economic subjects and has
for years been considering some of the
problems which present; themselves in the
matter of taxation. He has devoted espe-
cial attention to the subject. of the taxa
ton of mortgages and has Iopg been con
WINGED that the taxation, of mortgaged real
estate at it's full value, in addition to the
taxation of the mortgage itself, was not
sound economic law, When he took his
seat in the Assembly. in 1899 he undertook
to pass a bill which would embody his
ideas on the subject and result in more
equitable adjustment of the taxation of
mortgaged real estate, and at the session
of 1901 he succeeded in passing such bill
only to have.it vetoed by. Governor La
Toilette. .%..,:.E.>f. ~
In his inaugural message the governor
had dwelt at length upon the need of a.
mortgage taxation bill He displayed a;
surprising, lack Of knowledge. of economic
law-as he did in many other parts of his
message-by coupling bank deposits and
mortgages together, while discussing them
for taxation purposes, and on the subject
he said in part:
Governor Recommended 1t.
.'It is asserted that it will raise the in
terest rate to make money and mortgages
pay taxes. Possibly it may increase the
interest rate somewhat to enforce the law
as to money and mortgages. In California
where they have.a constitutional provision
that real estate mortgages shall be assessed
to the owner of the mortgage, and the as
sessed valuation of the real estate reduced
by the amount of the mortgage, two differ
ent claims are made by those opposed to
the assessment of mortgages: One, that
the interest rate is increased to an amount
sufficient to make the borrower pay the
taxes; another, that an agreement be-
tween the borrower and lender is insisted
upon by the latter, requiring payment by
commission or otherwise, sufficient to re-
imburse the lender for the amount of
taxes which he is required to pay upon
the mortgage It is. a fact, however, as
shown by the last census that the interest
rate in California is lower tAan in adjoin
ing states, though this may be in part due
to Independent causes. After much discus
sion ON the subject, Missouri adopted at
ment similar in effect to that of Califor-
MIA. WHATEVER MAY BE THE Elk
ACT FACT AS TO THE EFFECT ON.
INTEREST RATE AS BETWEEN THE
BORROWER AND LENDER, THE
PRINCIPLE is TO BE RECOMMEND
ED BECAUSE 1T TAXES EACH MAN,
JUSTLY ON THE RECORD. THE
MORTGAGOR HAS TO THE EXTENT
OF THE MORTGAGE PARTED WITH,
AN INTEREST IN THE REAL ES-
TATE, THE MORTGAGEE HAS, AC-
QUIRED THAT INTEREST, AND
EACH rs TAXED ONLY UPON HIS
PROPORTIONATE SHARE"
With the encouragement of the COVER
nor's utterances on the subject, Mr.. Frost
consulted with the members of the tax
commission, who had been giving the mat
ter good deal of study, and as result
of their conference the bill known as No.
284A was prepared. It was written by
Mr. Curtis of the tax commission with
the approval of Judge ellison, the head
of the commission, and upon its passage
by the Senate Judge ellison congratulated