The San Francisco call., 1908-11-30
DOUBLE TAX
LEVIED ON
|. MORTGAGES
Millions of Dollars Are Involved
in the Amendment Carried
at Recent Election
Savings Banks and Other Insti.
tnti0ns VIII Suffer If Legis-
lature Does Not Act
Attorney General Says Lending
Concerns Must Include Mort
cages in AssessabIe Assets
Officials OF Local Banks Believe
Amendment VIII Not Af-
feet Them

m n ILLIONS of dollars in taxes ara
M involved and practically every
savings bank. in California Is
affected by the legal questions
which have arisen as a result OF the
mortgage tax amendment 1t is the
opinion OF the attorney general that
unless the next legislature adopts
remedial measures the mortgages win
carry double taxation.
Every savings bank and other nnan-
eial institution in the state is now
assidously studying the question. Under
the previous Law banks and individuals
lending on mortgages paid the taxes
on the mortgage in accordance with
an agreement. Under the amendment
the borrower must pay the tax on the
entire property. including the mort
gagged portion Attorney General U. S.
Webb says. while the property mort
gagged is to be assessed in the name
of the borrower, the bank or lending
concern or individual must include the
mortgage among its assessable. solvent
assets and thus pay second tax on the
mortgage.
Will Seek New Law
That opinion OF the attorney general
of the state means that every savings
bank in the state Will join to go before
the legislature at Sacramento next jan
uary to fight for change in the codes.
At present San Francisco bankers are
not satisfied regarding the status of the
mortgage assessments. They have dis
cusss I'd the matter at length and have
decided that IL necessary they will CO.
operate with Los Angeles and interior
bankers to secure clearer legislation.
w. E. Palmer, cashier of the Hum
boldt savings bank and secretary Of the
San Francisco savings banks associa-
ton. said yesterday that he did not
think that mortgages would be included
in a banks assessable assets under the
application of the changed law.
How Bonds Are Assessed
Under the California law bonds OF
California corporations are assessed to
the issuing corporation and not to the
holder, and for that reason all invest
ments made by savings banks in in
dustria1 securities are in California
bonds. / believe that mortgages will
be so considered under the changed
law: said Palmer. The lender will be
exempt entirely and the borrower win
pay taxes on the full holding. Previ-
ously the bank, by special agreement
with the client. would pay taxes on the
mortgaged portion of a parcel OF
land and the land owner would pay on
the balance.
Amendment Considered
The effect of the Amendments was
considered at meeting of the execu-
tive committee of the Savings banks
association held prior to election. There
were present at that time George Tour
ny of the German savings. George
Story of the Mutual ssavings. Lowell
White of the San Francisco savings
union. Mr.. Abboc~ of the Securities saw
ings and myself. We believed that
mortgages. as assets OF a bank. would
be exempt We have been lending
money at fiat or net rates OF interest
on that understanding"
Attorney General Webb differed from
Palmer in his view OF the case last
evening. ~As 1 understand the law a.
present. the borrower will pay the tax
on the mortgage. but a mortgage will
count among the assets of a bank and
may be taxed. That form OF double
taxation can be remedied by the legls-
lature," declared the attorney general.