Vernon County censor. [volume] (Viroqua, Wis.) 1865-1955, 1904-01-20
EQUITY YBErwEENLESDER AND BORROWER
District Attorney Bennett Interprets the New
Mortgage Law

Permit me through the columns of the
CENSOR, to say a word with reference
TO the new mortgage taxation law.
am prompted TO address You in view of
the fact that few persons, through a
misunderstanding of the facts, are per-
sistently proclaiming that the last legis
lature enacted a law axempting mort
cages from taxation, aud they insist that
this law Il the sole cause for the high
taxes in V.roqua. This is important, ii
true, but it is manifestly erroneous
While the statement comes with rath-
or poor grace from those whose political
bosses were working tooth and nail' at
the last session of the legislature. for the
enactment into law of bill eremptinq
att mortgages, notes, indebtedness and
credits Of erery kind from taration
still there are those who unconsciously
give heed to it. In this connection much
unjust criticism has been heaped upon
Gov. La Toilette, as though he were the
sole law making power of the state
Had he in fact been the whole thing"
at the last session of the Legislature,
there are many among us who confident
ly believe that we would have had much
more legislation and of vastly grester
importance than was in fact secured.
law is one of the very best and most
Just laws ever enacted in Wisconsin.
and having been successfully in force in
Massachusetts and other states for up
wares of twenty years. the wonder is
that 1t was not sooner adopted here To
ascertain whether or not mortgages have
been exempted from taxation by the new
law, as charged, we naturally look to
its provisions, the same being found as
Chapter 37S of the laws of Wisconsin
for 1903; and this is the only law that
has In any manner or in any degree
changed previously existing laws as to
the assessment and taxation of mort
cages in this state. We find upon ex-
animation, that this act provides, among
other things, that
Whenever taxable real estate shall be sub
ject to mortgage. such mortgage for purposes
! of taxation, shall be deemed an interest IN
such reai estate AND SHALL RE EASSEssFD
AND TAXkp AS SUCH INTEREST IN TIE
| ASSESSMENT nISTRI0r IN WHICa 5UCH
REAL ESTATE 1E LOCATED. AND NOT
OTHERWISE, and may be separately assess
| ed and taxed as hereinafter prnvided. When
| SO separately assessed the Interest of the
mortgagof tOwneF OF the land) in such real es-
tate shall be assessed for only such value or
| amount as shall remain after deuucting the
! assessed valuation of the interest of the
| MORTGAGE (owner OF the mortgagel from the
| dSSt1stA NhtuAtlOu OF IDe eutlFe real estate,
| tsection Chap 376 l. avs OF 1909
| The truth is that there is not sylla-
| BILE in this chapter exempting mortgages
from taxation The truth also is that
the mortgage interest is expressly re-
| quired to be assessed and taxed as an in
terest in the land WHERE THE REAL Es-
TATE Is SITUATED. This law does ex-
actly what was sought to be accomplish
ed by the Frost Mortgage bill, vetoed by
Gov. La Toilette during the legislative
session of 1901, because of certain un-
constitutional provisions 1t may be
added that the Milwaukee Sentinel and
many of the same element now criticis-
ing the present law, found all sorts of
fault with the executive for mis- veto of
the Frost bill, charging that he vetoed
a measure 10 equalize taxation between
the rich and poor. Section of the Frost
bill and section of the presepy law are
exactly alike, but in other respects they
differ widely. In the present law all the
constitutional objections to the Frost
bill which were urged by Gov. La Foil
cite in his veto message have been abro.
gated. The law is founded upon the
most equitable considerations. To illus
trate Let us suppose that am the own
er of home worth s. 000 upon which
| there is mortgage of $1,000. Under
| the former law have been assessed and
| compelled to pay taxes upon the entire
valuation of my property, towlt; 81, 0O0
| though my actual interest in the proper
ty was but 81, 900. Moreover, the per-
son from whom ] borrowed the 81 200,
was compelled to pay taxes on his mort
| gage of 81, 900 also. Therefore, it Is ap-
parent that heretofore my property was
| made to bear the excessive and false val
uation of So, 900 and was doubly assessed
| to the extent of 81, 900 Was it Just that
should pay taxes on the 81, 900 interest
in my property Ibid not ownS Certain.
| ly not. | should not be required to pay
| taxes on the entire valuation, 81, 900,
when my interest in the property. which
| is 81 600, and that Mr.. Jones, who holds
the mortgage for 81, 000 should pay
| taxes on that amount, thus we are both
assessed on the whole of our respective
interests in the property. This Is pre-
cisely what the new law accomplishes
No proposed legislation was ever more
thoroughly discussed than was this
mortgage Law during the last campaign
Our party was roundIy abused by that
portion of the democracy which follow
ed the leadership of David s Rose, for
failure to pass the Frost mortgage bill,
said 10 contain the same principle which
is now applied properly and in consti-
tutional manner in the present law. A
democratic campaign document was
printed and extensively distributed
throughout the state crfticising Gov. La
Toilette for his veto of the Frost bill,
and arguing at length Ior the adoption
of the principle contained in the present
mortgage law.
The present law further provides that
the parties may stipulate In their mort.
gage which Of them will assume to pay
the taxes on the mortgage interest in
the land New mortgage blanks are
now for sale differing from those form
erly used in this respect. From my ex
perience in procuring loans know that
money lenders. in some instances, are
already making q difference Of per
cent on the rate of interest, where the
landowner agrees to pay he saTes, and
this inures to the benefit OF the borrow
er That is to say, money may now be
had at about 2 per cent. lower than for
merly, where the borrower agrees to pay
the taxes on the mortgage, because here
tofore both were taxed on the same &C
tual value Quite recently party pro-
cured loan OF about ~, 600, al 5 per
cent. interest, on farm valued at f6,-
600, the mortgsgor agreeing 10 pay the
taxes. Heretofore the owner OF this
land had been required to pay taxes on
the entire valuation, 81, 900. While I'M
der his contract he now pays taxes on
the valuation Of g. 900 on his farm,
which is no more or no less than be for
merly paid, he reaps the advantage OF
IL l.