The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1912-11-08
emptlon of Mortgages
Taxation.
from

The Senate last week passed Sen
ate Bill 81 which provides, Money
loaned at a rate of interest not ex-
ceeding per cent per annum evil
denced by a note, the payment of
which is secured by a mortgage Oh
real estate situated in this State
shall be exempt from taxation" The
passage of this bill suggests two
questions: First, Does the bill en-
body a good policy? Second, Does the
bill fulfill the platform pledge?
Whether this bill embodies a good
policy has been discussed so much at
length during the last few years in
connection with other questions that
we will treat it only briefly believing
that a brief reference to some Of the
objections to ii is enough to condemn
IT, By the Bank Commissioners Re
port Tor 1911 it appears that our saw
ings banks md trust companies hold
mortgages on real estate in Vermont
to the amount of S16,477,1 1887.
Exempting these mortgages as the
above bill does would deplete the
State Treasury to the extent of S115,-
1888. This sum should be increas-
ed by the amount of the national
bank mortgages held to secure old
debts by a few thousand dollars, so
that the loss to the State Treasury
could not be less than $120,000.00,
which would have to be made up by
direct tax or from some other source
At a conservative estimate there are
ten million dollars of mortgages held
by individuals residing IN INC State
that our subject to local taxation
Taking a conservative average rate II
taxation to be $1.75 Git is probably
$3.50 the Town Treasures would
lose the sum of $175,00000 Adding
this sum to the amount lost to the
State Treasury would make S295,000,-
90, or in round numbers $500, 100000.
Where is this $300,000.00 to come
from? Ii must come from other tax
payers already burdened, for one
mans exemption is another's burden.
AS the grand list for the entire
State is 1910 was $2,397,75 it is
seen that the towns in order to re-
place the $300,000.00 would have to
increase their tax rate between
twelve and thirteen cents on dollar.
Would this be just and beneficial?
There is much mortgaged indebted
ness in the State securing bonds, but
we understand that the act above is
intended to discriminate against
bonds secured by mortgages because
it reads, evidenced by a note, pay
ment of which is secured by a mort
gage on real estate" etc. AS we have
many enterprises that II is for the
interest of the State to develop and
these enterprises can be best pro-
NOTED by dividing the debt into bonds
instead of notes and securing them
by mortgage, it would seem poor po-
Icy to exclude Vermont investors
from the purchase of these bonds as
the bill would virtually do.
There is another class OF loans that
are as beneficial and even more com
mon than real estate loans, though
they may not aggregate as much, yet
they aggregate probably over $4,000,
600, viz:-loans secured on personal
property This is the only kind Of
property that many borrowers can
give as security for a loan. Very
frequently our young farmers start
out by leasing farm. and borrowing
enough money for equipment to en-
able them to carry out their lease
and after they have accumulated
some money in this way they become
purchasers and farm owners. This
law implies no benefit to such Dor
rowers. Our merchants too, are com
PEELED 70 borrow large sums of money
aggregating, perhaps, ten million dol
lars and since their property is not
in real estate they could get no bene-
H. from this act. There are large
classes of our manufacturers whom it
is advisable to encourage that would
be likewise excluded from the bene-
fits Of the act Take our granite in
dustry A larger part of the manu-
factufers are heavy borrowers but do
not possess real estate and would,
therefore, be Disseminated against in
favor of the manufacturer who poss-
essed real estate. a discrimination
would be made in favor of the real
estate owner and the neighboring
manufactures would be handicapped
as a competitor The law, would,
therefore, hamper the development of
our granite manufacturing business.
There are also, as every one knows,
many million dollars of loans on notes
not secured by either chattel or real
estate mortgages that could get no
benefit from the law. The policy of
this law is, therefore, discriminatory,
unjust and represses enterprises
and competition.
What about the origin of this bill
in the Senate under our Constitution?
How about the constitutionality of a
law that discriminates between
mortgages on land within and with
out the State? Is this a valid CLASH
fication? What about the discrimina-
ton between bonds and notes when
both are secured by mortgages?
Having briefly answered the first
question, We come to the second:
does the bill comply with the plat
form promises? II you will turn to
the three platforms, Republicans.
Democratic and Progressive, on the
subject of taxation, you will see at a
glance that IL complies with none of
the three. The Prohibition party
| that east less than two fhousand