Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-02-26
BY DON s. WARREN,
pnnl Estata Edifnr

Designed to block the sale here of
wildcat or fraudulent stocks and bonds,
the securities act for Washington re-
Gently introduced by Senator Blaine of
Wisconsin contains a small, one-sen-
tence clause near the end of the So
page printed bill providing for a man
datory increase in taxes on property
owners in some cases, 1t was revealed
today.
This "tax" feature of the securities
measure as now worded would place an
additional tax burden on a large num-
Der of local property buyers. most of
whom had nothing to do with the sale
of bonds on such property, in the opin-
ion of number of experts in the busi-
ness field here and one District official
who have been studying the proposed
measure The contention is made that
the measure would result in boosted
taxes for the owner of even small
dwelling, under certain circumstances.
The mandatory tax boost feature of
the bill is contained in a clause specify
ing without qualification that taxes
shall be assessed and collected on a
parity with the valuation placed on
property by the vender of securities on
such property, if such valuation be in
excess of the then current assessed
value.
Doubts COnstitutiOnaIity.
William P. Richards, District tax
assessor. told The Star today after a
study of the measure that he believed
this feature of the proposed law would
prove unconstitutional and would not
stand the test of court action because
it would make it mandatory upon him
as assessor to levy assessments of vary
| ing amounts against exactly comparable
properties.
Since the majority of new homes in
Washington are mortgaged and sold
under deeds of trust: since in most
cases the appraised value of such houses
/ exceeds the assessed value, and since
such mortgages are sold in the District.
! this clause would affect such a buyer
/ of a dwelling here and cause his tax
! assessment to be boosted to the level
of the appraised value placed on the
/ property by the iSsuer or vender of the
mortgage, it is pointed out by inter-
| eSted observers.
Numerous financial leaders in Wash
ington have publicly recognized the
| need for forestalling wildcat flnancins
/ schemes and sale of unSound stocks anC
bonds and several important group.
have gone on record favoring the prin-
ciples in the Capper securities meas
ure, winch is taShlOned after the
model" code sponsored by the Amer
lean Investment Bankers Association
Critics of the Blaine measure, which
is an enlargement upon the model
code, however, indicate they fail to see
why the securities act should be made
a tax" measure or what good would
come from this clause.
Text of Tax Clause.
! The clause in the Blaine measure
/ giving rise to this opposition reads:
| THE assessor of the District of Co.
| lumbia shall make his assessment. and
/ taxes shall be levied and collected in
/ conformity with appraisals or valua-
/ tionst stated in advertising, circulars
or other written or printed matter con-
! corning the security based on property
/ located in the District of Columbia
/ provided: That such appraisals or val
/ uations shall be in excess of previous
| assessments or the assessments that
would otherwise be made by the asses
| Sor, but this shall not affect the as
sessment of like, similar, or contiguous
property"
Local interests studying the measure
! proposed by Senator Blaine are raiSine
| these questions:
IF a bond, mortgage or stock issue
is of doubtful value, why should it bt
permitted to be sold at all? And, Il
it can be sold, why should the pur.