Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1921-12-11
Ed. RICHARDSON TELLS
OF CONDITIONS IN State
Virginia Real Estate Associa.
ton to Ask Change iii
State Statute.
WOULD MAKE RATE soc FIAT
Decinres Remedial Measure Ii Not
Class Liquidation. but "For the
Good of Virginia." - Points Out
Weakness In Present Laws.
ny ". I,ny Nichnrdnon.


with SO much money IN the coun-
ny. why is 1t so scarce for the build
ms OF homes and tho purchase and
maintenance OF farms?
There is much 10 be said in advo-
cacy Of a reduction OF the tax on
mortgage notes from the present high
rate Of $40 per hundred to a lower
rate.
one OF tho greatest problems con-
fronting the country at large today
~ the houHing situation. There are
hundreds OF thousands who arc either
without homes. or who are living in
such cramped quarters as To produce
misery ana crime and the dreaded
conditions Of discomfort which are the
f"rerunncrs OF Bolshcvism. These
conditions are not only detrimental
80 the large city dweli.r. They strike
directly AT tho welfare Of our far
in"r class az well
So anything necessary In the way 81
'"ir cdial measures * not class l,gis-
iation. nor IN the peculiar Interest Of
amy group. but Of ali I'll. people.
seeks Flint 5u-Crnt Rate.
The Virginia Real Estat. Associa-
ton has given much study TO the
underlying causes which seem TO be
hinderinK normal development. and
believes that one OF the chief con-
uihuting factors In Virginia * the
heavy tax on mortgage notes. So UNI
der its slogan OF For the Good 90
Virginia. IL IS preparing 10 ask tn"
ucNt session az tn" Legislature. which
rouv.u"S IN January, ~ reduce tho
lax on nortsaH: notes from its pres
rnt maximum %: Si.l9 per hundred
~ cents Hat. payable a; the date
~ rcCordatiOn of the mortgage.
i.. I
Spiu. but should tn. selfish interests
~ any small group bv permitted 70
stand in the way Of relieving til"
mortgage money markc, tor the
builfinH OF homes AMI ihe PURCHASE
md maintenance OF farms in order
HAT ia" Gr.ntcr good ma be done
~ :hc greater number
one 81 tho chief elements in tho
way of solving our housing condi-
;'uns and Agricultural advancement
g. thc great scarcity OF mortgage
money. owing 10 the fact that other
lines Of Investment, considered almost
equally as safe, OFFER much higher
Mt-rcs, rates. Tn. conseIucnc. OF
VirS!nias nigh tax on mortEag"
notes ~ that the source Of money IS
practically dried UP, and why?
WI. Mortgage Money IL scarce.
what inAuccmcnt IL there for a
!rnirr ~ money To place it in real
81 h!ch he pays sic tax. plus his in
come tax. netting him not more than
E49o, when he can place his money in
iuuniclpai taS exempt bonds. govern
lnrnt bonds and like securities. and
s.t "A net Nicld OF per cent or high
- and not have to worry about his
returns Money Is "a much OF a com
modify as grain. cotton or steel. and
those having IL to ofcr viii naturally
.eeh the most favorable market for
trade, no matter whether that market
l.. here or there, or in tax exempt
securities.
walter Stabicr. comptroller OF the
metropolitan life insmranc" Company.
which is said to he the largest lender
on mortgages in the world. is auihor-
ifv for the statement that one very
large holder of mortgages in New
York CITY, said TO have owned Sl5,-
40 400 in mortgages. had only l.6 per
cent OF his income LEFT when he hitd
paiI his taxes for 1915 and has since
been paying brokers commissions FOR
believing him OF his mortgage notes.
c!tc these references. taken from
The Saturday Evening Post OF Octo-
her ). 1921. t. show the keen com
nctitiou Il mortgage note has 10 en-
counter.
Easy To Ernde the Inv.
Nor do / have to tell you that the
rrcatcr majority Of the mortgage
lax is never paid. What is there to
prevent me from loaning hal: Il mil
lion dollars in this class Of security,
placing the notes in my safe within
an envelope with the name of some
on, In Kalamazoo on il. and hiding
behind the claim that this money is
Tot mine. but belongs to so and SO,
ju some other place outside OF the
state. They cannot touch II under
these circumstances, for the law
plainly says that the note is taxable
az the domiciie OF the owner. The
hill reducing the tax 10 80 cents Hat.
payable at the time of rccordation,
places the burden equally upon all
and not only on those who are WILL
Ing TO make the proper return. or
the widows and orphans. whose funds
pass through the courts, and are in
this way made II matter of record Tor
taxation. I am reliably Informed tina:
state Auditor Lee Moore made the
statement before the committee con-
sidering similar tax bill at the last
session of the Legislature. that tncru
was about s7S.o0O.000 in mortgage
notes that should have been returned
for taxation In 1919, and less than
s2s 100000 was actually given in.
The experience OF other States that
more money has been brought out
because ono would feel that IL was
more equitable and give IL in.
There are many ways OF evading
tho tax, and as long as the tax re-
mains as high as II is now. it viii
continue to be evaded. If a lenocr
can command per cent in other Sc
curities. he will demand It in mort
gage notes. What is the conse-
auence? Tho borrower. II lie must
have II to snve his home or farm, is
forced to pay this heavy tax in the
way OF n big bonus. In other words
7.1J per cent besides the brokerage.
Tho law says the fenacr must pay
this tax. but YOU want the money
must have It. and you reimburse him
TO make the loan. With the tax so
cents fiat. as suggested. the lender
gets $50 net note, and tho S,a.e
Will receive all the revenue that Is
coming to It because we get 1t at the
date of recordatlon.
o..