J





Real  Estate   Record





AND BUILDERS' GUIDE.





Vol. XXI.





NEW YORK, SATUEDAY, APEIL 20, 1878.





No.  627.





Pitblts^ied Weekly by

TERJIS.
ONE YEAR, in advance....SIO.OO.
Communications should be addressed to

C.  AV.  SWEET,

Nos. 'MS AND 347 Broadway.





BUNGLING LEGISLATION.

The bungling and abortive elforts which have
been recentlj- made iu the State Legislature to
compass the subject of mortgage legislation,
whether for exemption or taxation it is diflicult
to discern, certainlj- constitute the verj- enibodi-
inent of legislative incapacity. A fortnight ago
we called attention to the manifold evils of a bill
which had then passed the Senate. We are
agreeablj^ disappointed in being able to congrat¬
ulate our readers upon the defeat of that bill in the
Assembljr. Along with these glad tidings comes
the information that another bill of kindred im-
Iiorfc has been incubated iu the Waj's and Means
Committee of the Lower House. The relation of
these two bills appears to be that of father and
sou. The text of the later oue will be found in
our newscolumu. A superficial examiuatiou of it
will convince those who have taken anj"^ interest
iu the subject that, while some of the intricacies
of the earlier bill have beeu removed, its greater
evils and absurdities*have beeu intensified and
perpetuated iu the new measure. Our best infor-
uiatiou leads us to believe that these measures
have had their origin principally, if not exclus-
ivelj', among countrj' members, aud that their
object is to relieve the farmei-s, who happen to
own mortgaged farms, from some few dollai-s of
taxation ivhich they find it iuconvenieut to bear.
As the organic law requires such legislation to
partake of a geuei-al character, the relief demand¬
ed bj' this rural coustitueucj' is likelj^ to impose
upou the owners of landed interests iu cities
a peculiar aud excruciating burden. It passes
comprehension how such vicious, partial aud per¬
plexing legislation can escape the condemnation
of keen lawyers and business men iu the commit¬
tees of the respective Houses. Such euac'.meuts
arouse just suspicion as to the amount of wisdom
which presides in our legislative councils.

If the country at this moment is suffering from
one evil more than another, it is from uuwi.se, in¬
trusive aud disturbing legislation. Ai a time,
wheu of all others, its business interests need
repose and exemption from irritating causes, they
seem more than ever to be menaced with radical,
special and ill-advised legislation. For five bitter
J'ears the best business interests of the country,
mercantile aud manufacturing, have writhed un¬
der the agitation of the currency question iu
Congress, aud now these same interests are shak¬
en to their very centres by the prospect of a
complete over turning and reconstruction of the
tariff laws. In our own State,'real estate inter¬
ests, lying at the foundation of the whole social
and mercantile fabric, have been burdened with a
load of taxation piled mountain high; administer¬
ed under processes which are slowly strangling
their very life. Instead of the permanent and sub¬





stantial relief which wholesome legislation would
alfoi-d, the very fii-st preseutmeut of the subject
of taxation iu tho State Legislature is m the
shape of crude, bungling aud ill-digested devices,
such as the lueiisures upou which we are animad¬
verting.

It is not easj- to clearlj' define the real object
sought to be attained by the promotei-s of this
suspicious legislation. Many objects maj' be im¬
agined aud assigned, aud the evil effects of the
proposed measures inaj' be readilj' traced bj'
those accustomed to -watch the operation of .such
laws. The least insight iuto the subject w-ill fur¬
nish an assured conviction that if the present
proposed law finds a place upon the statute book,
it will afford uo real i-elief to the ownei-s of prop¬
ertj' nor to the owners of mortgages, while it will
be sure to entail upon the w-hole commiuiitj' con¬
fusion, distraction aud serious hardship. Assum¬
ing that in these measures a double object is con¬
templated, that of relieving the property owner
aud the mortgage owuer, or of providing the
means of equating taxation between the two, it is
safe to say that thej' flj- flat iu the face of both of
these propositions. It is proposed to allow a
mortgage debtor to deduct the amount of his
mortgage from the assessed valuation of his prop¬
erty for taxation, aud to impose upou hira the
obligation of giving the authorities a clew to the
owuer of the mortgage, so that if he happens to
be a resident of this State, he maj' be made to
respond to the full amount of the tax upon his
mortgage. As a majority, probablj', of mortgages
are held by mouej-ed institutions, which are al¬
ready exempt by law from taxation ou their
mortgage investments, and as another propor¬
tion, uot a small one, are held bj- lenders residing
out of the State, it is more than likely that in
practice the mortgage debtor will be debarred
from availing himself of the exemption which
this law professes to graut. In this light it is
simply a discrimination against the private lender
ou mortgage who happens to be a citizen of this
State, and will certainlj', if the law is strictly
enforced iu the interests of borrowei-s, drive our
own capitalists out of the mortgage market.

There is another provision, how-ever, in this law
which resembles the Irishman's famous post¬
script to his letter, in w-hich, after writing it, ho
announces his decision to uot send it. This other
section provides that an agreement may be made
between the borrower and lender as to which ono
shall bear the tax, or w-hether it shall be divided
between them iu au agreed proportion. The
privilege of making such au agreement certainly
does not require the authority or mandate of any
statute. In effect this section will defeat} the
operation of the whole law, or rather will so far
suspend its action that the capitalist w-ill either
decline altogether to lend on mortgage, or else
will compel the borrower to pay the taxes as he
is doing at present. To complete the farcical
character of this statute it would be only neces¬
sary to add an additional section to the effect
that this statute is intended for legislative pastime,
and will probablj' have no application after all to
the relations of borrowers and lenders.

We are forced, however; to -welcome even such
crude and bungling legislation as this, as the
earnest of a desire on the part of our law makers
to deal, if not intelligently then to the best of





their abilities, with this pressing aud imperative
subject of real estate taxation. Bj- the best
authorities, the taxation of mortgages is recog¬
nized as a double taxation of real estate, and this
proposition is too simple to require demon¬
stration. It is the highest injustice aud the
exemplary evil of our preseut laws that real
estate, tho least able to bear oppressive taxation,
is reallj- subjected to a double tax. If there is an
honest and sincere purpose ou the part of our law
makei-s to mitigate the evils w-hich now oppress
our real estate interests, especiallj- iu the matter
of mortgages, the w-aj- is reallj' plaiu and clear.
When we recall tho alile and lucid expositions
which have beeu made of this subject during the
past fifteen j'ears, w-e are siniplj- amazed at tho
lack of inforinatiou at present displaj-ed by the
legislature.

To remove this double tax ou real estate and
to lift in the most direct and effectual manner the
burden of oppression from both property owner
aud mortgage owner, wc merelj- require to have
the tax entirelj' taken off mortgages.

Probablj' three-quartei-s of the amount of exist¬
ing mortgages are exempt bj- previous enact¬
ments, aud J'et the fact that the remaining por¬
tion is held for taxation, that mortgages owned
by individuals resident iu this State are subject
to taxation whenever found, introduces au ele¬
ment of uncertainty and disadvantage in the
negotiation of mortgage loans w-hich has a ten¬
dency to throw them into the hands of moneyeil
corporations aud non-resident lendei-s. Were the
taxation of mortgages ouce removed, large vol¬
umes of resident personal capital w-ould at once
seek these investments, aud the rate of interest at
which good mortgages w-ould be easilj' negotiable
would correspond with the i-ate of interest paid
on gov. rnment bonds or anj- other prime un¬
taxed securities.

It is uot onlj- with reference to this single mat¬
ter of taxation of mortgages that legislative ac¬
tion is required. Sooner or later the w-hole sub¬
ject of State aud municipal taxation must forciblj-
present itself to the minds of our law-makers, aud
imperiouslj- demand broad, comprehensive and
i-ational treatment. There is no subject at the
present moment that is more profouudl j- agitating
the minds of the people cf tho entire countrj-,
aud especiallj- of this State aud citj-. The de-
maud is outspoken aud clamorous for thorough
reform of the wietched system of tax administra¬
tion with whicii we have struggled, and by which
we have beeu cursed aud oppressed for so many
J-ears. Partial, piecemeal, bungling legislation
will uot afford the desired relieL The subject
must be taken bj- the roots and dealt with intel¬
ligently, decisivelj- aud promptlj'.

THE TAX ROLLS.
It is the glorious privilege of Americau citizens
to be taxed. Foriuerlj- we rebelledlagamst tax¬
ation without representation, but now, having re¬
presentation, w-e are called u[k>u to bear content-
edlj- the fullest measure of taxation. In what¬
ever respect our sj'stem of republican government
may excel or fall short of European systems, it
has certainlj' reached a point where it can chaL
lenge comparison with the most absolute and
despotic of the old governments in the matter of
levying and collecting taxation.   The annual pro-