The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-02-10
FLEMING BILL VICIOUS.
senator OgbOrn Points Ont How 1t
Would Affect the Public.


That willy and resourceful gentleman who
represents Allen and Adams counties in
the upper House-"Steve'' Hemingway
find that there is more than one way to
kill cat save strangling it with melted
butter. He engineered his mortgage bill
through yesterday afternoon by an exer-
else of exceedingly good generalship and
campaign in which the personal equation
cut pig figure. When the bill was passed
there were a number of senators who
thought il was a good thing. and they
voted for ii. Last night, however. they
were given talking to by several senator's
who led the fight against the bill. and the
error of their ways was pointed out to
them. They were shown wherein the dam
ger of the bill lies, according to the views
of the bills opponents, and that 1t is
dangerous piece of legislation for the Re-
publican party TO fool with it. They were
informed by at least two senators who are
in a position to know something about
financial matters that the bill is a piece of
vicious legislation. All of which was eff
fective in conversation, and some of those
who voted for the bill are ready TO switch
In order to give them a chance mo-
ton may be made in the Senate this MORN
ing to reconsider the vote on the bill by
which it was passed. At least two OF the
senators who voted for the bill are willing,
it is stated to make the motion to recon-
slider and it will probably be done. If that
plan works out the bill will be killed deader
than the proverbial stone and Mr. F1em-
ings victory will be a barrenness like unto
the desert of Sahara.
Senator Wolcott and Senator Ogborn, with
Senator Gray, are leading the fight on the
bill. They have gone over ii thoroughly
and they are convinced that it is one of
pieces
which the General Assembly has been
called upon to consider. The bill is known
Senate bill No. 15S. 1t was kept under
cover adroitly by Senator Fleming until
the time came to spring it.
MIR. OGBORN'S EXPLANATION.
Senator Ogborn makes this explanation OF
the bill:
I'm voting for the Fleming mortgage
bill the senators evidently did not thor
oughly understand what the bill provides.
1 have particular or personal interest
in the measure, but L regret TO see my
party associates put in the hole as the
Democrats have put them on this PROPOSE
tion
LAS this bill stands it will exempt from
taxation all existing mortgages held by
nonresidents, and it would apply only to
mortgages made in the future. To illus
trate my point, the mortgage Indebtedness
of the railroads of the State is about $780,
100000 Most of the mortgages have from
twenty to fifty years TO run. These under
this Dill would not De aHecteO IOT
years, but the burden would fall heavily on
the farmer or business man who wants to
negotiate a loan on farm or piece Oh
business property He will have to agree to
pay the taxes on the mortgage or agree 10
borrow the money at much higher rate
of interest in order TO enable the lender TO
pay the tax as this bill contemplates. In
other words, 1t puts the small borrower SO
thoroughly in the grip of the foreign lender
that he may be pinched for all the juice
there is in him.
ITO make couple of local illustrations
/ would refer to the mortgage loans upon
the Stevenson building and upon the New
Claypool Hotel building. The former is
mortgaged for $4,000 at or Az per cent.
at 5 per ' cent. " The total rate of
taxation in Indianapolis for the year
was sos on the 500. Now when
these mortgages mature and have to be re-
newed somebody is going TO have to pay
the difference. 1t will be the tenants of
the property or the owners. 1t is easy to
will charge enough more in rentals to
make up the loss the taxation brings upon
them.
RAISES INTEREST RATES.
1 have negotiated a good many loans in
former years on farms and small business
properties, securing the money from for
eign life insurance companies at low rates.
L do not recall ever seeing one of these
mortgages which did not contain the pro-
vision that if any tax should be levied upon
it the borrower should pay the tax.
There is not enough money in Indiana
to take care of loans which will be sought
by farmers and business men on farms and
small properties. The inevitable result of
this bill becoming law will be to raise
the rate of interest to cover the cost OF
taxes assessed on mortgages.
Again, mortgaged property is always tan
gible and never escapes taxation. have
heard officers of Marion county on oath de-
clare that there is much property in Marion
county which is assessed for taxation at its
full cash value. Unquestionably much of
this is mortgaged. Under this bill both
the property and the mortgage will be
taxed.
Raising interest rates is a poor business
for the Republican party to be into and my
experience in and knowledge of the loan
business assures me that this bill can have
no other effect than increasing rates of
interest.
Senator Fleming's bill, in a word, pro-
vides that mortgageors shall bear the burden
of taxation. 1t is pointed out that this
gives the mortgageor the opportunity OF
charging interest rate not only high
enough TO cover the tax, but to squeeze
a bit more out of the MORTGAGE.