Imperial Valley press., 1908-10-24

There is before the people to be voted upon at the coming election a proposed amendment to the State Con- stitution which, if adopted, will abolish the assessment of mortgages. This proposed amendment is known as Sen ate Constitutional Amendemnt No. 26, and repeals Section of Article XIII of the Constitution relating to the as sessment of mortgages, deeds of trust, contracts and other obligations by which a debt is secured
 The State Assessors Association and the State Board of Equalization have issued an address to voters, urg- ing adoption of the amendment. in which they explain the failure of the laws to place the burden of taxa tion upon the money-lender. They say:
 "It is notorious that the banks and lenders of money always add to the rate of interest such rate as shall cover the contingency of increased taxation, and also to make the rate, fractions. But the tax rate is not constant, as is evinced by the decline of State taxation for the past six years and the lender provides for the in crease of taxation, but does not allow the borrower the benefit of the de- cline in the rate. In every loan there is not less than one-half of one per cent added for contingencies after the assumed rate of taxation is added to the really acceptable interest. The mortgage assessments for 1908 amounted, in round numbers, to two hundred million dollars. The one-half of one per cent on this sum amounts to one million dollars. The exaction of this money is simply legalized rob bery. Bear in mind this million-dollar penalty is exacted each year, so long as the mortgage runs.
 Again: In many cases mortgaged property is reduced in the assessment below he true value of the mortgage, and the mortgage for assessment pur- poses is reduced to the assessment of the property. The borrower still pays to the money-lender the full amount of the taxes estimated as in terest, but the lender pays only the taxes upon the reduced value.
 Again: If mortgage be executed in the middle of March the borrower pays until the first Monday of March of the following year a tax in the form of added interest, which is never paid by the lender.
 "The instances are numerous where the owner has lost his property through tax sales based upon these mortgage assessments. A mortgage is assessed against the property on the first Monday in March; soon after that date the mortgage is paid off and satisfied. In nine cases out of ten the money lender will neglect and refuse to pay the mortgage tax and the same chances are that the property owner will never think of the mort gage tax when he pays his own tax. The consequence is that the land is sold to the State for the mortgage tax. In due time the State finds a purchas- CT and sells the property, without the owner ever knowing there was de- linquent tax against his property.
 "On the whole we see no good re- suit in assessing mortgages. On the contrary if mortgages were free from taxation, the rate of interest would be less, the cost of assessment less, and the borrower would be less at the mercy of the money-lender.
 "We appeal to the common sense of the people of the State, who are suffering from self-imposed burden, to vote for the adoption of this amend ment and exempt mortgages and deeds of trust from taxation"