The Dawson news. (Dawson, Ga.) 1889-current, 1922-12-26
1sa, PEAKS AGAINST
. FREE SECURITIES
EVER-INCREASING IS
- OF SUCH BONDS TEND
LII STAGNATE INDUSTRY.


preventative Charles r. Crisp, OF
-, district, delivered a strong argu-
: T in favor of the proposed amend
f;nt to the constitution which would
..ohibit further issues OF taX-eXempt
r. Growth and Practice.
= Quoting figures from the treasury
=. department to show that 81 800, 000,-
600 worth OF these bonds were issued
q this wear, with the traffic increasing
annually, Representative Crisp empha-
sized the Importance of putting stop
TO the practice before the country
supply of capital is tied up in idle in
yestments. He also stressed the
amount OF revenue lost by the led
eral government from outstanding
non-taxable bonds, declaring the fig
IRE had been estimated at S300,OUO,-
600 yearly.
The most detrimental effect OF the
enormous issues OF tax exempt bonds
and securities Mr.. Crisp described as
the stagnation it tends to create in IN
dustrial development, explaining that
capital naturally sought those fields
OF investment which guaranteed a
stated income. Such an investment is
always found in tax-eXempt securities,
he said.
bus; I from Mr. Crisp declared. They
put " I'M on idleness; they with
draw lralS from the necessary IN
dustrial and business channels OF the
country. In my judgment they make
people pay more for the necessarles
OF life, and really and indirectly to the
high cost OF living
Explains Position.
Explaining his reasons Cor taking
that position the Georgia. congressman
said that when railroads and other
public enterprises need money Tor bet
terments and developments they go
into the market and compare with tax
exempt securities.
THE man with money to loan is
going to loan it where 1t pays him the
most" he said, adding: He gets more
from a per cent tax free municipal
bond than he does from 10 or II per
cent taxable loan if he is man OF
large fortune. Therefore, if the rail
roads get the money necessary Tor
their Developments they must pay a
high rate of interest, which tends to
keep up high freight and passenger
rates"
Discussing the relation Of nontaX-
able securities to the agricultural m
terests OF the country, Mr.. Crisp said
According to the hearings before
the committee there are about S8,000,-
100000 on farm mortgages out IN the
United States, only about per cent
of which was obtained through gov
eminent agency. You who are so so
1icitous for the farmer should think
well of this 95 per cent of the loans
outstanding to the farmers III money
belonging to private individuals, most
w men Of large means. The 5 per cent
tax-free securities will net the lnves-.
tor more than 7 or s per cent farm
mortgages. What is the result. The
farmers are finding it difficult to Dor
row money and when their loans ma
ture-and they are maturing all the
time-if they can not finance re-
newal it means sales on the block.
One OF the witnesses before the
committee said few years ago there
was gentleman that had seven mil
lion invested in darn mortgages. Now,
he has o5 per cent of that amount m
vested in tax-eXempt securities.
Only Two Objections.
Concluding, Mr.. Crisp stated there
were only two objections to the pro-
posed amendment.
"One is that it will increase the
value of bonds already outstanding,
he said The testimony before the
wavs and means committee was that
there are ten or twelve billion mun1ci-
pal bonds outstanding, and, OF course,
this will increase their value. | pro-
pose to stop it now when we have
only ten or twelve billions, rather than
to wait for years when there will be
thirty billions According to the re,
turns there are 81, 100000 issued
this year II you don't stop it next
year there will be twice that. As time
goes on they will be piling up to the
extent that you will have to correct
the evil and when it will be twice as
great as you find it today.
"The other and only objection | can
find is that it might possibly and prob
ably will make the state and munlci-
palities pay a little more interest on
the money borrowed