Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1902-06-07

corning the money of the neighboring
counties. The mortgages so discovered
will now be taxed at their face value, and
as a result one of two things must hap
pen: Either the lender must content him
self with an insignificant amount of in
terest, or the interest rates demanded of
the borrower must be largely increased.
That this must happen is patent to any
body who knows anything about the lend
ing and borrowing of money and the
assessment of taxes. With money so plen-
tiful as it is in Wisconsin to-day few
mortgages draw over per cent. A great
majority of them draw per cent or less.
In different counties the rate of taxation
will run from 2 to 21a per cent, and in
some instances as high as 8 per cent.
Mortgages, unlike real estate, will be
taxed for their full value and the result
will be that the net revenue viii be only
from 2 to per cent, and in some in
stances as low as IL per cent. That the
professional lenders will not content them
selves with such low rate of interest is
self-evident. The result must be in the
majority of cases an increase in the inter-
est rate.
The injustice of the workings of the
present system is we'll shown by the stu
alton in Shawano and Outagamie counties
before referred to. The money loaned by
Outagamie county lenders on mortgages
is owned almost entirely by the farmers
of that county. Gentlemen who are posted
say that in a great majority of instances
money is loaned at 5 per cent. or less.
Taxed as they will be at or 21a per cent,
the net interest will be at most 2h per
cent, and in some instances only IL per
cent Already the action of the assessors
has changed the rate of interest in effect,
though it nominally remains the same.
The professional lenders are now insisting
upon a Commission" for obtaining the
loan. That Commission" invariably
amounts to the sum of the taxes which
will have to be paid upon the loan. A
case is cited of Shawano county farmer
who has small loan from an Outagamie
lender whose mortgage had long been over
due but upon which the interest had been
paid regularly, and it had been allowed to
run. It came due this year after the Sha-
wano county assessors had reported to the
assessors of Outagamie county, and when
interest paying time came the farmer was
notified that he must either pay the loan
or pay commission for its renewal. A
little calculation showed him that the
commission was the amount of the taxes
which the lender would have to pay.
Hard ON the Farmers.
In this state there are thousands upon
thousands of aged farmers who have toiled
for lifetime to obtain money enough to
give them bare living when put out at
interest, and these farmers will be hard hit
by the hunting out of mortgages for tax
alton. Many of them will not know how
to get around the refusal of the borrower
to pay higher rate of interest, and their
incomes will be cut in half. The profess
sional lender will not be hurt because he
will know how to work the Commission"
dodge. On the other hand, there are thou
sands upon thousands of young farmers
and working men who have purchase price
mortgages on their homes or farms and
they will have to pay the increased in
terest either directly or in the form of
commissions The few who will escape
will be those whose mortgages are held
by people who either through ignorance
or by reason of conscientious scruples will
not demand commission for making the
loan. In any event somebody must suffer
and it would all have been avoided by the
Frost Mortgage Bill, which the governor
vetoed.
AS will be seen by the provisions of the
bill, it enabled the borrower and the lend
er to agree who should pay the mortgage,
and inasmuch as it reduced the taxation
of mortgaged property by the amount of
the mortgaged debt, there would have
been no excuse for an increased rate of
interest. 1t is true that under that bill,
as under any law that can be devised, the
man with money to lend will have an ad-
vantage over the man who has no money
and must have it, but at the worst the
borrower would be no worse off than at
present, and if he were half way shrewd
he could be better off.
The bill would have Improved the con-
ditions as they were before the tax COM
mission acting, as board of equaliza-
ton, took the step it has taken, and to-
day it would relieve a situation which is
of vital Importance to the tens of thou
sands of Wisconsin people who are either
in debt, or are looking to a small fund
of savings for means of livelihood. The
bill passed both houses of the Legislature
by an almost unanimous vote, and was