The Barre daily times. (Barre, Vt.) 1897-1959, 1912-11-08
MORTGAGE EXEMPTION
FORM TAXATION
Proposal OF Vermont Senate Is Declared
By John w. Gordon to be Wrong
In Policy and to Fulfill None of
the Three Platforms.

tdltor llmest
5 The Senate last week passed Senat
bill 81, which provides, "Money loane,
at rate of interest not exceeding
per cent. per annum evidenced by note
the payment of which is secured BY
, mortgage on real estate within thi
state shall be exempt from taxation
The passage of this bill suggests tive
questions: First. does the bill embed,
a good policy Second, does the bill
fulfill the platform pledgef
Whether this bill embodies a good pol
icy has been discussed SO much at length
during the last few years in connec
ton with other questions that we vii
treat il only briefly believing that briei
reference to some of the objections TO il
is enough to condemn it. BY the bank
commissioners report of 1911 it appear.
that our savings banks and trust com.
panies hold mortgages on real estate in
Vermont to the amount of sl6,477, 1851
Exemptng these mortgages as the above
bill does would deplete the state treas
ury to the extent of Sl5 ,309.S3. This
sum should be increased by the amount
of the national bank mortgages held TO
secure old debts by few thousand dol
lars, so that the loss to the state treas
! ury could not be less than $4,000,
| which would have to be made up BY a
direct tax or from some other source.
| At conservative estimate, there are
ten millions of dollars of mortgages held
by individuals residing in the state that
are subject to local taxation. Taking u
| conservative average rate of taxation
to be Sl,T5 lit is probably $3.50, the
town treasures would lose the sum OF
$4,000. Adding this sum to the amount
lost to the state treasury would make
S295,000, or in round numbers, $780,
900. Where is this 100000 to come
from? II must come from other tax
payers already burdened, for one mans
exemption is another mans burden.
As the grand list for the entire state
in 1910 was S2,397 .754, it is seen that
the towns in order to replace the $780,
600 would have to increase their tax
rate between twelve and thirteen cents
on a dollar Would this be just and
beneficial?
There is much mortgaged indebtedness
in the state securing bonds, but we I'M
derstand that the act above is intended
to discriminate against bonds secured by
mortgages because it reads. evidenced
by note, payment of which is secured
by Il mortgage on real estate" etc Az
we have many enterprises that it is for
the interest OF the state to develop, and
these enterprises can be best promoted
by dividing the debt into bonds instead
of notes and securing them by mort
cages, it would seem poor policy TO ex-
clude Vermont investors from the pur-
chase of these bonds as the bill would
do.
There is another class of loans as
beneficial and even more common than
real estate loans, though they may not
aggregate as much, yet they aggregate |
probably over S6,000,000, viz; Loans I
secured on personal property. This is
the only kind of property that many Dor
rowers can give as security for loan.
Very frequently our young farmers start I
out by leasing farm and borrowing
enough money for equipment to enable
Them to carry out their lease. and after
hey have accumulated some money in
his way they become purchasers and
arm owners. The law implies no benefit
% such borrowers. Our merchants. too.
ire compelled to borrow large sums of
money, asgregating. perhaps, ten mil
ions of dollars and since their property
s not in real estate they could get no
benefit from this act There are large
lasses of our manufacturers whom il is
to encourage that would be
likewise excluded from the benefits of S.
he act. Take our granite industry. A
anger part of the manufacturers are
eayy borrowers, but do not possess real !
state and would. therefore be discrim-
mated against in favor of the manu-. |
acturer who possessed real estate. A
iscrimination would be made in favor
{ the real estate owner and the neigh I
oring manufactures would be handi- :
lpped as a competitor The law would 4
therefore,, hamper the development of q
ur granite manufacturing industry. c
There are also. as everyone knows, d
ANY million dollars Of loans on notes y
OF secured BY either chattel OF real es- Il
lte mortgages, that could get no benefit g
-om the law. The policy of this law is, i
lerefore, discriminatory, unjust and re- a
Iesses enterprises and competition. !,
What about the origin of this bill in I
ie Senate under our constitution How b
bout the c0nstitutionality of a law that
scriminates between mortgages on land
thin aud without the stateg Is this
lid classification What about the
scrimination between bonds and notes
hen both are secured BY mortgages :,
Having briefly answered the first ques-
on, We come TO the second does the Of
u comply with the platform promisesg ?.
You turn 20 the three platforms. Re
lblican. Democratic and Progressive. on j,
e subject Of taxation. YOU win see at n,
glance that il complies with none OF
e three. The Prohibition party. that II
- less than two thousand votes. had
plank IN IL platform with which this az
L might b. q compliance though that
storm does not exclude bonds secured "
real estate mortgages. The RepubIi- 70
n platform reads in part a. follow Do
We recommend changes in the Laws that
j equalize the tax Of the individual u
idrrs ~ money and savings instifm-
NJ and urge. that a. far 81 practical t.
{ ultimate benefit % such loHered rate
assured the borrower. We urge the VI