The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1906-01-03
"WEDNESDAY. JANUARY 3, 1sos)
He approachest nearer the gods who
knows how to be silent, even though
he Is In the right. Cato.
Our Case is Proved.


we beg that our readers will not com
plain of us for devoting so much space
to the discussion of the tax question, for
1t is. in our view. one of the most i'm
portant questions that can engage the
attention of citizens and officers of gov
eminent
In all our discussion of the question
we have endeav to establish the prin-
clpse that only substance should be
taxed; that all substance should be taxed
once. but only once: that double taxa
lion is unjust taxation; that to tax 10th
The land of holder and the mortgage
debt upon his land is double taxation.
and that the double burden falls upon
the borrower. for THE consumer always
pays the tax
We have said that If only the equity
of the borrower in landed estate be
taxed, then. OF course, the lender should
be made to pay upon the amount of
his loan. But this is roundabout way
Of taxing the substance; 1t is contrary
to the fundamental principle of taxation.
and It would lead TO complications, and
probably TO fraud. Therefore. the only
way that we can see of relieving the
borrower is to exempt the mortgage, and
SO give him the benefit of lower rate
of interest.
Our contention is amrably borne out
in a letter which we printed yesterday
from the secretary of the New York Tax
Reform Association, and to which we In
vite the attention of all who disagree with
us on these points. Our correspondent says
that in the State of Idaho. among the
items of property exempt from taxation,
are classed "all dues and credits secured
BY mortgages or other lien" In Con-
necticut, Massachusetts,. New Jersey and
Wisconsin the law in regard to taxation
of mortgages Is similar, and provides
that the mortgage shall not be taxed
unless EXEMPTION TO the amount of the
mortgage is claimed by the owner of the
real estate mortgaged The New Jersey
law reads as follows: Hereafter no
mortgage of real or personal property.
or both, whether given by individuals or
corporations, or the debt secured by
such mortgage, shall be assessed for tax
alton. unless deduction therefor shall
have been claimed by the owner of the
such mortgaged property and allowed
by the assessor The law in the other
States named is similar. .sIn these
States" says our correspondent 1.-THE
practice is to provide in the mortgage
itself that the borrower of the money
shall not claim any deduction from the
assessed value OF the real estate. The
result is, therefore, that the real estate
Is assessed at its full value, but the
mortgage IS not taxed and the borrower
secures his loan at the lowest rate of
interest compatible with the condition
of the money market and the soundness
or security. without any Increase on ac-
count of taxation, or the fear of taxa
ton. Our correspondent is informed by
county auditors OF Idaho that, after the
passage of the law exempting mortgages
In 1885, the rate of interest on mort
cages in that State dropped third.
He says, moreover, that IN Massachu-
sets mortgages were exempted in 1851,
and the Massachusetts Tax Commission
of 1897 estimated that the deduction in
the rate OF interest due 10 such exennp-
ton was from one-half TO three-fourths
of per cent. Mortgages are taxable in
the State Of New York, he further in
forms us, and the rate OF interest on
mortgages in the rural counties Of Mas
sachusetts bordering on New York is less
than in similar counties across the line
In New. York.
The most interesting case cited is that
of California That state has a unique
system. in that the Constitution requires
that the equity in the real estate mort
gagged shah he TAXED 10 the owner, and
the mortgage shall be taxed to the mort
gage. where the real estate is situated .
thar any contract by which the borrower
agrees to pay the, taxes shall be void.
The result rs that In California the rate
OF interest on mortgages. exceeds the
rate OF interest on unsecured loans by
about the averags rtax rate plus one
third to one-haif per cent. more. to IN
azure the lander against a possible In