The Birmingham age-herald., 1907-04-28

and their papers concerning the loan were forwarded to the counsel for the society in New York. In the meantime, the recent legislative act referred to had been passed. A copy of the act was sent to said counsel in New York. After said counsel for the society in New York had examined the recent act of the legis
 latLre, l received letter from the comp troller of the society, as follows q leg leave. to say that if you will | call on Messrs. Howze X Howze you will find that by this time they have re- ceived written instructions from our coun- sel here, as to the basis upon which the loan can be put through"
 Extracts from the letter of instruction to Messrs. Howze & Howze, local coun- sel for the society, read as follows: "The application was considered and accepted without knowledge of the existence of any such law or that any tax would have to be paid by the society on the mort gage as capital invested in Alabama MT. M. P. Messer was notified that the ap- plcation had been approved at the rate of per cent net, to the society, and as 1t now appears that the society cannot mo.-e this loan and receive 5 per cent net, it does not feel that it can properly be called upon to carry the transaction through"
 --ftcr consultation with the borrower.
 
 be written in manner that would re- lieve the society from any and all taxes imposed by legislative acts of Alabama, which are in force now and may here after be imposed during the term of the loan. All expense was paid by the borrower, thereby giving the society a net income of per cent on the loan, upon which basis the loan has been put through, the borrower having paid the tax to the state of Alabama of $S9 and oblgatng himself to pay all taxes dur In; the term of the loan as stated above Oh, inconsistency upon the part of the legislative act in which 1t tries to place burden of taxation upon foreign money to be loaned in the state of Alabama, wi.ch burden does not touch the for eign corporations, but falls heavily upon the borrower. as shown in the case cited above.
 No doubt 1t will be the same in all loans made by foreign corporations loaning money in Alabama, during the time the act under discussion, remains in force in Alabama. It is right and just that all individuals or corporations should receive a just rate of interest for money loaned
 They should be encouraged to come into our midst instead of being invited to stay out by trying to Impose a burden of taxation upon them, especially when they are offering us money at such low rates of interest that encourage the building of homes, with the building of homes coma good citizens and increased taxes for the | state. I dare say that more than 30 per cent of the money used in erecting new buildings by the city of Birmingham and other cities of our state is borrowed | money. furnished by corporations outside the state of Alabama and In this way the tax values of our cities have in- | creased thereby yielding to the state a | 100 per cent more tax revenue than will 1 be realized by the recent legislative act. We cannot borrow money to build build | ings with from our local banks, and we have no local corporations or individuals that have the money to invest in real estate mortgages loans for building pur- poses, in quantities that anything like | equal the demand. therefore we are com | pelled to look to money lenders outside l the state of Alabama. if out cities and country grow and prosper in the future | as they have in the past. We must in- | vte and encourage outside money to our aid
 As in the recent legislative act you ] say to the corporations that you must pay a tax to loan money in Alabama, which | they may do, but who furnished the money? The borrower, thereby increas- l ing his burden and in which you encour- age .ne banks and the individuals who | are loaning money to say, We cannot loan 1 you at the former rates of interest our | legislature has imposed a tax which has ! increased the rate of interest on mort gage loans and we must charge you a rate thus and so. It is true that the act does not effect our banks and individuals | in Alabama. but just as sure as you are born, the above expressions are being used now or similar expressions and will | continues to be used as long as the act | remains In force. The act encourages the l lender to raise rates of interest It is a fact that when money is at a premium