132 THE LURE OF THE LAND 



of time, because if interest rates were to fall he could borrow 

 money elsewhere at the lower rate of interest, discharge his 

 obligation, and thus secure the advantages of a cheaper rate 

 on money. 



BUBAL CBEDITS FBEE FBOM TAXATION. 



The commission further points out that in order to 

 make these long-time bonds as cheap to the farmer as 

 possible, it is of prime significance to make them free 

 of taxation. I have long been of the opinion that the 

 system of double taxation which is so largely practised 

 in this country is fundamentally, morally and ethically 

 wrong. For instance, if a farmer borrows money on a 

 mortgage, he has to continue to pay his tax on the land 

 which secures the mortgage. At the same time the 

 person who holds the mortgage is taxed upon the mort- 

 gage itself, which is naturally another tax upon the 

 land, as the rate of interest must be high enough to 

 pay the man who loans the money a reasonable interest 

 and also to enable him to pay the tax upon his holdings. 



The commission therefore strongly urges that these 

 long-time mortgages at low rates be specifically ex- 

 empted from taxation both by state and national au- 

 thorities. They quote President Taft to the effect that 

 farmers are paying higher interest rates than any other 

 class of business men, and refer to the fact that in the 

 Middle West, where land values range from $100 up- 

 ward per acre, if the land be mortgaged for 50 per cent, 

 of its value, and if the mortgage is taxed, the debtor 

 owner is investing $50 per acre and paying interest on 

 $50 per acre. He is also paying directly the tax on the 

 land and paying indirectly the tax on the mortgage, 

 which is essentially what I have pointed out above. 

 The commission, continuing, says: 



