New-York tribune., 1906-04-20
THE GOVERNORS BRIEF.
The Governors brief follows:

THE GOVERNORS BRIEF.
The Governors brief follows:
The Legislature of 1905, by vote Of s. TO 81 in the
Assembly and p to Is in the Senate passed bill
an annual tax Of one-6aif of Der cent on an
mortgages, in lieu of the general property tax The
Assembly and Sc to 3 in the senate has now passed
single tax of one-half Of per cent cen a ON mortgages
on real property. payable, upon the execution Of
in T6ch the rea properPy s snated OF
o KRe G as Raqy taken en- psce 3hs sqDt 6 of
d slhgIe year Is accounted for not by any change
by the fact that in the independent judgment Of
t trdS bi OF the members voting in each house on
on the statute books. Such expression of policy
tion.
The idea of fixed annual mortgage tax at a low
the Executive Of last year. In the year 1900 both
Of ontp eo3qaa HoG e IN L9e report
annual tax on all mortgage indebtedness. past and
has received cordial support in certain quarters as
1t has aroused bitter antagonisms in others.
cate no more serious reversal of policy my part
pride of opinion lead me to stubborn and unrea-
| sonable refusal 10 reverse my own policy in re-
! / refused to sign the original bill OF last year
St S IL had 6een amended so as to provide for the
Postponing the levying of the annual until July
under the existing law. will be- if it is not con-
Iinued beyond said date. In my annual MESA ge
recommended that this measure be given a fair
trial perfecting it If necessary before interfering
atoms sake is not, however. a rule of statecraft
and since the stock transfer tax has been upheld
to be dependent for revenue upon th connusne
! Of the annual mortgage tax. Approval Of record
rel property; but it would seem from the reports
OF the State Tax Commissioners that fully seven
! state is found in those Counties Which are most
sion to the annual nortgage tax P In the M year
1903 the total assessed valuation OF personal prop
amount was '' ASSESSED sS''G IN EfeateT @ News Ses
9Ta psd in aSe5 eT for All paroe
highway taxes axes s 2B9u Of this bis amount
the rest of the state paid less than 100000
REASONS FOR OPINION
There are, however. objections to the bill here
final determination whether or not to approve the
While DO not approve The proposition that bills
which are. defectively drafted should be sent TO
edge on the part Of the legislature that the same
| and while am conscious of the fact that disap-
proval of a bill for technical tends put
by indirection some measure of Legislation which he
hesitates to disapprove on principle. this measure
indicate my technical objections 10 this bill some
First-The language of the bill seems to be eva
| sive and ambiguous in stating the nature OF the
tax law in relation TO the taxation Of debts secured
| by mortgages but the caption of Section 293 de-
| itself says that the "tax is imposed on
eoh or SoT cea tns eeorn ah
taxa tax upon the act or transaction of placing
decision of the Court OF Appeals recently handed
down in the stock transfer tax case AS tax on
consttutionality. by reason Of arbitrary ciasslnca-
second-The subject Of taxation is mortgages OF
real property, yet the bill contains no definition Of
! reasonably clear that all mortgages that can be
recorded as MORTGAGES OF re%i properg are su4JgC M
mortgage on real property is exempt from taxation
! only upon such proportion of the mortgage indebt
edness as the value of the real property bears TO
| the entire value OF the mortgage security, and
| change in policy In this regard can be read into
! the courts Interpret the bill to permit cor
! poraton execute a mortgage on its real estate
payment of any tax whatever. the mortgages OF
which the trainers OF the oll assure me II is NOT
| intended TO confer upon them a cIeaT ~ ~oeIlnluon
under the bill would remove all ambiguity on this
Third-The bill makes no provision for the collec
tion OF any tax upon mortgages recorded prior 10
1y Ssara g tbereb PT IS avaMced until after that date
! This omission will permit certain classes or cor
porate mortgages to escape from payment OF any nv
tax II at m P9GeS m @ on 1d 6oG0e o
is advanced thereon until the next day sucn mort
! gage would be taxed neither under the annual tax
| a fatal defect in the present bill but one which
! readily be corrected by providing that as amounts
corded prior 10 that date, certificate shall be filed
in the Office of the County Clerk other recording
officer Of the county setting forth the amount so
advanced and providing for the payment of the tax
thereon.
Fourth-It is TO be borne in mind that many mort
/ cages have been and more will be, placed on
record since July 1905. upon which, under the pro-
visions of Section 295 OF the present law tax is
/ paid at the time OF recording for the year ended
/ June 80 1906 and such will not be paid until
June 30 1906 While the sa wing clause contained in
Section 20 of this bill aims preserve the pro-
visions Of Chapter l29 of the Laws OF 1905. in rea
ton 10 the leVyinG ana collection of such taxes
/ think that such section would be framed with
greater accuracy II il referred also the date of
recording such mortgages as well as to the date
when the taxes thereon become due and payable.
Fifth seriously question the prOprlety of the
Drovision for the optional payment OF taxes old
mortgages and on bond issues contained in Sections
30i and 800 as amended II is true the substance
OF these sections is contained IN the existing law,
but the change from annual tax TO a recording
tax changes the principle which should control IN
Ills regard There is a vast difference between
ercrrnP exemption from taxation prior mort
eases bv having annually OF ore-half OF per
cent which NAV continue fo- q lifetime and Secur-
I ine such exemption ny paving a single recording
tax OF one-haIf Of per cent. When mortgages are
exempted from taxation il should be done with re-
gard 10 the rights of borrowers to whom the rate OF
interest has been fixed by the rate OF taxation pre-
vailing when their mortgages were given. ana Ieno
ers' values should not be unwarranraoly enhanced
by legislative act
This Bill is a long step toward exemption OF
future mortgages from taxation. Past mortgages
remain subject the general tax pre-