The Montgomery advertiser., 1907-02-16


 aroused by the nature of certain pro- posed laws aimed to cover certain classes of trade. which are now hang ing fire in the Legislature. one or the classes of legislation which has at fracted the greatest general attention, has been that which aIms to place cer- tain restrictions on foreign corpora tions lending money In Alabama. Con cerning some of these proposed laws, A business man of Montgomery who is in close touch with these corpora tons said yesterday:
 Had you ever stopped to think about the effect of the new laws pro posed by this Legisla, ure on foreign Corporations lending money In Ala bama? It has heretofore been the poll icy of the state to invite foreign capi- taI to come to Alabama. This policy has led to great competition in this particular field. At the present time, there are probably twenty or twenty five mortgage companies. trust compa- nies and insurance companies compe ing for business along this line. The effect of this competition has been to reduce the rate of interest at which this competition has been offered to the people of Alabama.
 "A few years ago, it was rarely the case that money could be borrowed from these companies at less than eight per cent but for the last two or three years, the competition has been so heavy that only one or two concerns have been holidng out for eight per cent. one of the largest compAnies in the State has been lending money at seven and three or four others a. six per cent, all on farming lands.
 This has been a Godsend to the farmers and has had a great deal to do In enhancing the value of farming lands in Alabama. If, when a plantation is offered for sale, the would-be pur- chaser can negotiate a long time loan at six per cent in crest. the land can be sold much more readily and will, naturally, command higher price than if the purchaser had to spend several weeks in an effort to obtain a loan and then had to pay eight per cent for 1t
 .cuite a number of foreign corpora tions who loan exclusively on ely property, have been competing for business in Alabama at five and five and one-half per cent and few Of them loan at four and one-half per cent
 All of these companies have. up to the present time. been required to pay license of S150 for the privilege of doing business in Alabama, and. in ad- dition to this. a recording tax of fif- teen cents per hundl ed on the value of their papers when offered for re- cord. The above license is authority
 
 efnpted them from any other mortgage or franchise tax, excepting the tax on their mortgages.
 What do you think these companies will do If the laws now pending before the Legislature are passed?
 House Bill No. 61O. proposed by the Chairman of the Ways and Means Com mittee. imposes the same old stamp tax except in a more exacting form as it is made to apply to all renewal agree ments as well as original mortgages. This bill, Section 5b, instead of im- posing a licerise tax of $100 for the State as heretofore. now requires SlO0 to be paid In each "o1nty In the State in which said business is done. This, you will readily see, increases the Sta.e tax from Sf08 1s for'n~rly to say (pro- vided the company does business in half of the counties in the State) $3,- 400. and when the county tax (say fifty per eent( is added), this license tax will be increased $5.10o. Hind you, tn IS calculation Is on the basis that the company lendlpg the money will oper- ate in one-half the counties of the State only, aid Mhat the County Board of Revenue viii assess fifty per cent of the State license tax for che use of the county which thes have a per- feet right to do.
 ''Honse bill s11 also by the Chair man of the Ways and Means Commit tee. imposes what is called a fran chise tax" on all foreign corporations" of S70 on the first sl.000 used in Ala bama, and 8 tax of 1-10 of l per cent anually on all capital used in this State over the thousand dollars. A foreign mortgage company lending money on million dollars and over in Alabama, provided it did business on liberal terms. and had low rate of interest. have one large company in mind that has over this amount invested here, and this company would, there fore, pay S1,070, and this would be paid every year.
 House bill SIS, also by the Chair man of the Ways and Means Commit tee. to be entitled An Act to amend Sections 1921 and 1922 of the Code of 1896, proposes to enact this same tax over again under the name of 'Aamls- sion fees exacted of foreign corpora tions.'
 House bill 61O, by the Chairman of the Ways and Means Committee. Sec tion 1, lines 17 and IS, page 10 of said bill also imposes what seems to be an income tax on the gross receipts of all companies Doing the business of lending money or other business of like character at the same rate that property iJ taxes. It is hard to tell just what the Legislature does mean by this. The bill says on gross re- ceipts Whether 1t means on the gross amount of money loaned and col lected or the gross amount of interest collected. one or both it is hard 10 tell, and, for this reason. it is impns- sibIe to ascertain just what this tax would be. Of course, this uncertainty would be exceedingly objectionable, provided any company would entertalp Q for a moment the idea of doing husi. ness in Alabama, In face of the otheI taxes imposed. ...
 Now. to recapitulate You have. ''First-An admission fee of, say. .$1,0I0 "Second-A license fee for each
 county, according to the above
 calculation. amounting to-. .. 5,1Ot ''Third-A franchise tax of f...... 1,07t "Fourth--A recording and stamp
 tax of ........'..,,...,.. 9oC