Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1905-07-18

the result is that honest people alone
tell what they have, while the dishon
est conceal it. This constitutes, first,
premium on dishonesty; second, a
burden on the honest, for If half OF
the property Of given class escapes
taxation, the other half has to pay
double rates in order to yield a given
amount Of revenue; third, an increas.
ing burden, because each year of sue.
cessful evasion renders the public
conscience more lax and reduces the
monest to smaller minority
Systems Have Been Futile.
ties have been devised to remedy this
evil which I need not discuss. AS is
well known all Of them have proved
futile. One plan to relieve the owner
OF encountered property from the pay
ment of taxes on more than his actual
interest in the property deserves spe-
cial attention. The theory on which
1t is based is this: That a mortgage
Or lien, deed of trust, contract, or
other obligation by which debt. is Sc
cured, conveys an interest in the
property for the purposes Of taxation.
That the interest of the mortgage or
lien holder is measured by the amount
unpaid on the obligation, and that the
interest of the mortgagor or owner in
the property is measured by the value
Of the property less the amount paid
on the debt secured. Hence the plan
is to assess the MORTGAGE or lien
holder, at the situs of the property.
with that interest in the property rep
resented by the amount unpaid on his
lien, and to assess the mortgagor or
debtor with the difference between
the value of the lien and the value of
the property, and this is made to ap-
ply to liens on both real and personal
property
Could Not Enforce Law.
Laws to that effect have been
adopted in the states of New Jersey
Massachusetts, Michigan and other
states, especially in the sout.A. The
states of California and Missouri not
amended their state constitutions to
the same effect. Most of these states
also adopted laws making all contracts
between the debtor and creditor.
whereby the debtor agreed to pay all
of the taxes on the property covered
by the lien, null and void; and some
of them provided heavy penalties or
forfeitures for violation thereof We
must admit that at first the plan
looked justt and feasible. 1t surely
looks reasonable to say that if I am
only worth $4,000 and own a farm
worth $4,000, but only have $4,000 Of
my own money in it, and some one
else has mortgage on it for the other
$1,000, that it would be just and equit-
able to assess me with only $4,000, the
value of my interest and assess the
mortgage with the other $4,000, the
value of his mortgage. The object of
the law was good; the difficulty was in
enforcing it. The result was exactly
what should have been anticipated.
Men with money are not bound to
loan it. If they loan it, it is because
| they think the investment to be bet
ter and safer and the net income there.
| from larger and more sure, than from
other investments. Men who were in
! the habit of loaning money at s or G
per cent interest and beating the as,
SCISSOR. we're found unwilling to loan
at those rates, and pay taxes. They
said to the borrower, as we have to
pay the taxes on your land we must
| have more interest. The result was
rates on mortgage loans increased just
enough to meet the taxes on the mort
gage, and the burden of the taxes fell
back on the mortgagor as before. Ii
the meantime money loaners were
thinking hard, and devised simple
plan to defeat the whole thing. In
stead of loaning at per cent and pay
taxes, they took notes and mortgages
drawing per cent and inserted s
clause in the mortgage that the mort
gagor should have the right and priv
lege of paying all of the taxes on the
land, which necessarily Under that Law
included the mortgage and the mote
secured thereby, and that if he cid 81
pay the taxes and furnish the mort
gagee with a receipt showing then
paid, then the mortgagor should de
duct per cent interest from the rat
) to be paid by the terms of the not,
and mortgage. That would leave thu
mortgage 5 per cent interest net OF
his loan, just what he was receivin,
, before the law was enacted, and cos
the mortgagor just what he had BEEF
paying. These contracts were uphelt
ny lQ6 courts NEUTRALITY-SUSPICIOUS. IN
provisions of their statutes and stat
constitutions Please note, in pass
: ing, the contract in the mortgage wa
not that the mortgagor should pay tn
taxes, for that would be violation
of the law, but that he should have tn
right and privilege of paying them
he desired. If he didn't pay them, Q
course the holder of the mortgag
!, could well pay them himself and co
lect the full rate of interest called 70
: by his contract.
; at is needless to say several c
1 these states have repealed the Law
while others would have done so wer
they not prevented by the provision
: of their state constitutions. The S,
4 preme court of Missouri has declare
tile amendment to the constitution {
their state on the subject, and the la
l adopted to enforce it, both null an
} void as in contrayention of the fou
:. teenth amendment to the federal col
Q stitution. Russell, ct al, VS.. Croy, {
q AL 164 Mo. 50; GO S. w. 849). So /