New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-06-05


1 per cent. If. then, we exempt mortgages from
all taxation, except to the extent of one-half of
! per cent, there will naturally be no substantial
change in the average rate of interest.
Second-The experience of former Controller
Roberts has Informed US that when State bonds
offered for sale year two ago the bids
came in two ways; one, If the bonds were exempt
from taxation, and the other If they were not,
and there was difference in the two rates OF
nine mills.
Thrd-Frank Bailey. the vice-presdent of the
Title Guaranty and Trust Company OF New
York City, testified that the result of laying
single tax of four mills on mortgages in Penn
sylvana that in new loans two rates were
Indicated one for interest and one for the four
mills tax; but that the two combined were less
than the interest alone had been before the
change in the method of taxation Mr. Bailey
further testified that the result of exempting
mortgages in Massachusetts was that the aver
age interest rate was reduced to 31a per cent.
PROFESSOR sELIGMAN QUOTED.
These reasons are ccgent now as they We're
in 1900. The savings banks of the State have
deposits Of more than a billion dollars, of which
many millions investment deposits, rather
than small savings, made at rate of interest
varying from 3 to per cent; to escape taxatioh'
non-taxable bonds of the State and nation, bea~-
ing only per cent interest, command premiV IL
Large sums now seeking these forms of iEvest-
ment will doubtless become available for mort
gage loans when 1t is certain that the mortgage
security will net the lender from to per cent
Seligman of Columbia College, the well lInown
student of taxation, in a discussion of the Mort
gage Tax bill of 1900:
Many individuals would welcome the oppor-
tunity of investing funds in a species of prop
erty which would be taxed at SO low figure
This large influx Of capital would of itself tend
TO reduce the rate OF interest.
The allied real estate interests have been well
organized against this measure, and have doubt
less been effective in developing hostility to the
bill. No tax measure is popular Taxes and
death are the two painful certainties that can
not be escaped 1t is not difficult to arouse OPP
position to any tax measure from those
who will be affected thereby. The political
party that could honestly promise the abolition
of taxation would be deservedly popular Tax
laws should, in their operation, be uniform, uni
versa and not oppressive. The tax law which
this bill supersedes. so far as it affects mort
cages is unequal, partial and unjust. The ex-
emption of mortgages from taxation is one al
tentative; the imposition of some less crude IN
strumentality of taxation is the other alterna-
tive. The latter alone is practicable at this
time.
1t has been urged upon that the approval
of this measure will result IN disaster to the
Republican party. I have avoided the consid-
GRAFTON of this measure from a party stand
point. 1t Is a business proposition rather than
a political problem. The Republican party Is
the party of initiative and not the party of OPP
position. Its disaster has often been predicted,
but 1t has survived the consequences of its poll
cies on legislation. I shall not be deferred from
approving salutary bill because of its possible
effects on the party. / cannot believe that any
measure which eaualzes the burdens OF taxa a.
disastrous to the party interests TO al
low the present uneven and unfair taxation or
to put stop to the exemptions and evasions
which the present law permits 1t is a short
sighted policy for political parties to bid for
class support by class legislation. The people
are more numerous than any class, and they
want fair play all around
THE BILL WAS RUSHED THROUGH
The bill signed by the Governor is the second
mortgage tax measure to pass the present ses-
sion. and takes effect on July /. The original
NV
and after stormy debate passed by party votes,
despite the protests of New-York representa-
lives but these protests from New-York, well
as those of other parts Of the State, ultimately
directed attention to defects In the measure.
Edward Van Ingen and a number of others
attacked the bill, and in the closing hours Of
the session a substitute bill, that signed by
the Governor, was rushed through, but record
tax such as the Governor had indicated he would
like to have reach him was stified by legislative
leaders. The opponents of the law declare
1t to be inequitable and unconstitutional, and
submitted number of briefs to Governor Hig-
gins attacking the measure. A return to direct
taxation suggested an alternative, but
this was repused by the Governor, who declared
there should be no direct taxation in his term.
The present measure is believed by its friends
to be calculated to add about S1,5OOOOO to the
State revenue the first year and much more in
succeeding years, but its opponents declare It
will yield less than a third much
MEMORANDUM ON WATER BILL.
To his approval OF the gas and water bills the
Governor added a single memorandum, which
he attached to his approval of that measure Of
the Stevens committee dealing with the right OF
the city 20 use it's water supply to generate
electricity a bill which replaces in part pro-
vision stricken from the Mayors water Dill,
which was the subject of considerable discus
sion. On this the Governor writes:
It is to be observed that this bill presents
wholly different proposition from the matter
stricken out of the city water supply Dill IN
the Senate. This bill restricts to city purposes
the use Of the electric current developed, and
provides that additional water shall be USED
for said purpose than would otherwise De re-
quired by the city of New-York. The city water
supply bill in it's original form, provided for the
sale or lease of power and electricity by the city
to private consumers, and for the sale or lease
of water when not needed for city purposes.
These provisions had not the remotest relation
to the solution of the lighting problem, and af-
forded no protection against the lighting conpa-
MES. So far as / know, no opposition mas man
ifested itself to the plan of utilizing the water
owned or acquired by the city for the purpose OF
generating an electrical current for a municipal
lighting plant. The plan of developing power
and selling to private consumers was
Objectionable having no connection with the
main purpose of the water supply Dill, ana as not
being a proper city purpose within the meaning
of the constitution (Article s, Section 1O, which
provides that no city shall be allowed TO incur
any Indebtedness except for city purposes anu
as unnecessary II not improper
The effect of the omission of the words OBJ
iected TO from the water supply bill and OF the
present act is sentimental rather than practi-
cal 1t Will be years before such power can be
utilized and when il can be so utilized, Accord
,1,a ,ir,sa of he