HOW TO DO IT.

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our State cultivated by a dependent tenantry, and ownedby a few capitalists; and it ought not to escape atten-tion that this very transformation has already occurredto a great extent in New York City and other cities.Capitalists and institutions (except life insurance com-panies and savings banks, whose loans alone are freefrom taxation) will not loan on mortgages, but buy realestate and lease it for a term of years, because thisinvestment pays a higher rate than money loaned onmortgage subject to the contingency or reality of taxa-tion. The effect of the present law, even partially orloosely executed, has changed the form of investment,but has not prevented capitalists from obtaining theaverage rate of profit of investments.

The experience of New York in taxing mortgages isexactly what might have been expected. Capital whichformerly found its way into real estate mortgages is nowdirected into other channels to such an extent that, wereit not for trust funds, much of which must be invested inmortgages, and for the law which exempts the mortgageinvestments of savings banks and life insurance companiesfrom taxation, and compels those institutions to invest apart of their capital in such securities, money could notnow be obtained in New York for the improvement ofreal estate on pledge of the property.

It was formerly common to provide in wills, that prop-erty bequeathed, or to be held in trust, should beinvested in mortgages. This is much less frequent now ;