The sun. [volume] (New York [N.Y.]) 1833-1916, 1913-04-30
'FRAWLEY ANGRY AS
REPEAL BILLS PASS
Senator Defends His New Laws
for Tax Exemption Of
state Bonds.
SuLZER Is AGAINST THEN
After Signing Bills Governor
Heard That state Would
Lose S25. 900. 600.
SuLZER Is AGAINST THEN


duced by senator Wagner at the re-
quest OF Gov Sulzer to repeal the Fraw'
ley laws which he signed last Friday
passed the Senate to-day in spite Of the
opposition OF Senator Frawley.
The laws grant an exemption from
taxation to state bonds which have
been issued or are to be issued. the
idea being to create a demand for four
per cent. State bonds which the state
Comptroller's Office il about t. issue.
Lawson Purdy. president OF the New
York City Tax Commission. told Gov.
Suizer yesterday that the effect Of the
bills would be to make the state loee
$25 900 900 on its bonds in the next nifty
years. Acting on this Information Gov.
Sulzer had the repeal bills introduced.
Senator Frawley declared to-day that
the bills were all right and had not been
introduced and passed under a misap-
prehension. He said Mr.. Purdy did not
want the State TO secure any advantage
in selling it's bonds. although he Was
responsible for the passage OF the Sc
cured debt tax law which makes such
exemptions from taxation that the state
will lose s4lSOOO 900 In fifty years.
Senator Frawley was the only one
to vote against the bills. An effort n
to be made this week to repeal the Sc
cured debt tax law. which nets only
81. 900, 900 annually. il was said tonight.
The Senator gave out a statement to-
night showing that he introduced the
original bills after a conference with
officials OF the State Comptroller's Of
fice and the Governor.
The Legislature put over the tax bill
b h,,, a. Ia than, "a good ~
was Gov. Sulzer's only commenint.
! Senator F'rawley said.
The bills were made to apply to all
! bonds of the State outstanding and
10 be issued because it was the only
honorable thing to do. Those who have
bought state bonds did SO in full con-
| fdence and faith that the State would
always protect their interests and not
give To future bond purchasers advan-
/ tages not given TO them. The alter
native OF these bills is to raise the rate
on the bonds to 4i2 per cent or more.
and once fixed this can never be
changed. but the tax credit may never
! and probably never will be exercised
but upon a portion OF the bonds.
| The gentlemen who have urged
upon the Governor the great injustice
! OF this measure by the statement that
! it would take s2i000000 from the
Treasury in nifty years are the In
ventors Of the secured debt law. which
provides that on payment to the state
Of one half OF l per cent on par value
| for registration the bond OF any old
corporation outside OF the State shall
during its life be exempted from taxa
ton anywhere within this State. Since
! the law went into effect. on September
! /. 1911, the State has received about
! 81 .000,0 for the registration fee and
has exempted many old bonds OF other
States To the amount of S4lS o0u 900 IN
| ;aXes.
! Now these bonds escape local and
! State taxation AT the rate of per cent.
approximately per year. total of
| $3.50, 900 per year. in NIFTY years the
total will be s4ls.OOO, 900 taken from our
tax list. And yet these gentlemen object
to the State putting an advantage on
its own bonds which will enable 1t 10
| compete with the bonds in special
| market
| The mortgage tax law provides that
| by payinen, OF one half of per cent. on
registration the mortgage is exempt
from taxation. Hundreds of millions OF
mortgages were and are made tax
exempt and come into direct market
competition as investments with state
city ana other bonds. Its enactment
put millions into mortgages that would
have gone into bonds because Of q
higher rate. This mortgage tax eXemp-
tion did not apply to future mortgages
1t applied to all mortgages. Andrew
Carnegie registered bonds last year
which amounted to $4,000 600 exemption
Should not the State do some Of these
things for its own bonds?"