New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-08-25
TAX ON SECURED DEBTS
II. c. McCollom Says New Law May
Be Variously Construed.

To the Editor OF The Tribune.
Sir: The letter Of Mr. Pleydell in to-
DAYS Tribune, concerning the new tax on
occurred debts, Is the opinion OF a well
qualified critic and is particularly help
full BIZ reason Of the ambiguity OF this
act.
II Is. Of course, obvious that the same
bonds should not be doubly taxed, both un-
der the new law and Indirectly under the
mortgage recording tax law (Which law I
NAV add. is scarcely go hidden as to have
escaped observation). Without doubt such
bonds as are secured by a recorded and
tax paid mortgage would not be presented
for another tax under the new law out
my criticism related principally 10 bonds
secured by mortgages 10 be recorded IN
New York State--in other words, to the
securities to be issued under New York
State mortgages not yet recorded.
Subdivision C4O Of the act in terms re-
lates to any bonds forming part
Of a series which by their terms
are not payable within one year O..
and which are not issued for an amount
exceeding 1900 for each such bond d.
and the payment Of which is not secured
by the deposit or pledge OF any collateral
security" Certainly this language is broad
enough to include bonds secured by real
estate mortgage recorded IN New York
state.
Such being the case there Is nothing
upon the face Of this act TO show that
its intent was not to provide an optional
substitute for the mortgage tax, paruc-
ularly as there Is a bill now before the
81, 1iFlrr "A y
and substitute an annual mortgage tax, for
which the tax on secured debts might nave
been framed as an alternative. Then, too
double taxation would scarcely result from
the secured debt law, for, being an optional
tax. not many would elect to pay IT II they
had already been required to pay the mort
gage tax. Furthermore, there are certain
bonds referred 10 In the mortgage tax law,
Section 264, which may be presented by the
uortgageor and made tax exempt by the
payment Of the tax, but this right OF
presentation is limited in terms to the
mortsageor. This right II might have been
proposed TO extend by means OF the secured
debt tax TO the holders Of the bonds.
NJ point ia not that the new secured debt
law does apply TO bonds secured by mort
gage 10 be recorded in New York State,
but simply that. If It does not the words
not secured by a mortgage recorded in
New York State" should have been in
cuded In Subdivision CfO, and the doubt
and the consequent necessity Of learned
cxpostions thus obviated.
The act IS otherwise ambiguous, too, for
while Mr.. Pleydell states that the bonds
need not be stamped, but may be rendered
exempt by the giving OF a receipt for the
tax (as well might be concluded from Sec
ton 3SD, nevertheless, Section 1913 eN-
pressly provides that no exemption can be
obtained unless stamps TO the proper
amount are affixed and cancelled"
Your correspondent says that my sym
pathy should not be wasted on the ''un-
fortunate Controller" Here, again. do
not entirely agree with him, for the law
provides in Section $50 that adhesive
stamps for the purpose Of paying tho tax
shall be prepared by the Control
Ter" Apparently. the Controller is In tho
awkward predicament OF being required
to pay all OF these taxes.
HAROLD c. MCOLLOM.
New York, Aug. %. 1911