Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-01-22
TAX FREE SECURITIES
ga CONSTITUTIONAL

GA coNsT1TU TIoNAL
~ amendment prohibiting fur
Their issuance Of tax-exempt secur-
tiles would be Of great benefit to
farmers because it would reduce
the interest rate on farm mort
cages; Edward D. Chassell, Chi
cago, secretary Of the Farm Mort
gage Bankers association. today
told the house ways and means
committee. He urged passage OF
would submit the proposed const'-
tutional amendment to the states
for ratification. Adoption OF such
an amendment also was advocated
by Mckinley W.. Kreigh, repre-
sentinR the American Mining con-
aress. Mining interests. part'cu-
larly in the west, he said, have
been hampered because mo l:y
needed for developnlnt OF their
properties in the past few years
had been invested in increasing
amounts by the public in tax-ex-
empt securities" Inn Associated
Press Dispatch.
There is plenty Of opposition to
the issuance Of tax free securities,
and a sound argument in support OF
. prohibition against their further
issue can be made, but it surely
does not lie in the mouths OF rep
resentatives Of the farming inter-
est, to object to them on the
ground that such prohibition would
cheaper the interest rate on farm
mortgages. Farm loan bonds are
tax free and because they are tax
free they sell at par on 4 IL per
cent to S per cent basis. The money
50 raised is available solely tor
the use of farmers through farm
loan banks at . rate not to exceed
per cent above the rate on the
bonds sold. An enormous sum has
,,readv been raised and reloaned to
the agricultural interests under
this measure put through IN the
.arlv DAYS of the first administra-
ton Of Woodrow Wilson. During
the years when money was scarce
and high priced it enabled many
farmers to finance themselves at
rates Of interest much below that
paid by any other class OF bust
ness men. We do not believe that
the farmers want that law repealed
If they do no one else has license
to object.
The other class of tax free Sc
curities consists of government
bonds issued by the United States,
the various states in the Union and
subdivisions of states, including
counties, cities, school districts,
etc. We do not believe the farm
ers would profit very much by
eliminating the tax free quality IN
such bonds. # would only be tax
ing out of one pocket and putting
into another, for if these bonds
were not tax free, they would have
to carry a higher rate of interest to
make them sell and that additional
interest would have to be provided
by additional taxation. OF course
city bonds and school bonds issued
in districts lying within cities are
paid out of the pockets of city
jewellers, but inasmuch as more
than half the population of the
United States are city jewellers a
proposal to tax bonds issued in
urban districts and exempt from
taxation bonds issued on suburban
districts would hardly be practical
Its unjust discrimination would be
40 apparent that it could never get
embodied in our constitution. The
objection raised by the spokesman
of the mining interests to the
tax free bonds is also puerile. Min
ing investments will not be made
more readily by taxing of public
securities. Money. like labor
seeks investment where it can ear,
the most wages and take the leas'
risk Of loss. More money will &c
into mining investments when ths
chances of profit are more sure
and the risk of loss is less. It no.
another dollar Of tax free securitie:
was ever issued in the United
States we doubt if it would in
crease the investment in mines
Such investments are c'asses
among the risky ones. They pat
very great profits az times ant
they also involve great risk Of loss
The class Of investors who regart
safety a. the prime Requirement
for their money and are satisfied
NTH ,er cent interest to get tina