Morris tribune., 1907-03-02

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comparatively few mortgaGes we're
actually taxed, but the fesf q AKA
tion prevented investment IN mort-
gage securities by local lenders, and
the interest rate was increased by
this exclusion of local money from 2
mills to perhaps | per cent in some
counties. In 1906, as the outcome Of
ten years agitation for mortgage ex-
emption, law was enacted imposing
q tax of one-half of ore per cent per
annum on all mortgages thereafter
recorded. The tax was payable ct
the recording Office without regard to-
the residence of the owner of the
mortgage. In order to secure collec-
tion the administrative features of
the law were of necessity drastic.
The interest rate on mortgages i'm
mediately rose by from 8 to 8 mills,
and in New York counties next to the
Massachusetts line the interest rate.
was more than one half per cent
higher than in the adjoining Massa-
chusetts counties. In these Massa-
chusetts counties the interest rate
was almost exactly 5 per cent. About
four -fifths of the money was loaned
at per cent, one. fifth at higher rates
and one-fifth at lower rates. I'm
mediately across the line in New York
the rate was over 51a per cent, and
more than two thirds of the money
was loaned at over per cent, and
less than per cent of the money was
loaned at less than per cent. In the
city of New York the increase of the
rate between 1904 and 1905 was very
marked. In the borough of Brooklyn
in 1904, 81 per cent of the money was
loaned at rates over per cent, while
in 1905, Sc per cent of the money was
loaned at over per cent. The city
of Boston kept on the even tenor Of
its way with an average rate of about
per cent, and nearly half the money
loaned at less than per cent.
The enactment of the mortgage tax
law of 1905 was the greatest blessing
to New York. It walked people to q
realization of the Importance of mort
gage taxation and strenuous efforts
were made to substitute a recording
tax for the annual tax at the session
of 1906. This effort was successful,
and since last July mortgages re-
corded after that date have been ex-
empt from all taxation in the state OF
New York, except for recording fee
of one half of one per cent. As a re-
suit of this legislation, interest rates
Immediately fell, and today the city
of New York has lower interest rate
than 1904, before the annual tax law.
This lower interest rate has come in
spite of the fact that rates for call
money have been exceedingly high,
and the demand for money for great
public service undertakings has been
tremendous. As soon as the money
market is in a normal condition we
can expect an interest rate consider
ably lower than before the law of 1905.
So far / have only discussed the
effect of mortgage taxation upon the
borrower of money. When mort
cages are subject to the general prop
erty tax, which means that they are
occasionally taxed at very high rate,
the effect on lenders produces the
appalling injustice. Some lenders, by
one device or another, or by accident,
escape entirely, and obtain higher
rate of interest by reason of the law
than they would if mortgages were
entirely exempt. On the other hand,
some unfortunates are caught with
mortgages in their possession, and
are subjected to the confisication of
their income to the extent of one
third to three fourths.
Any one who has as have, during
the last few weeks, had women and
trustees come before him with estates
yielding per cent interest of which
the city will take more than one third
will realize the full iniquity of this
proceeding.
With this example of New York be-
fore Won Won cannot make If Won i'm
pose similar tax of one-half of one
per cent ON the recording of new
mortgages and exempt them from al
other taxation. You will ultimately
obtain by this course lower rate oi
interest for borrowers and the cruel
injustice to poor lenders, now com.