Delaware state journal. [volume] (Wilmington, Del.) 1870-1883, 1874-10-17
Mortgage Companies.


lFrom the Philadelphia North American
In the course Of an article on the dull
ness of trade and the stagnation Of capi-
tai and Investments, a recent American
writer says that money on mortgage can
only be had from Institutions on a very
different basis from banks, adding "We
shall be surprised If a good number OF
such mortgage institutions do not spring
up within few years, as has been the
case in France" and that ga few
aourishing companies have already been
organized for the purpose of lending
money on mortgage 10 farmers and other
owners of real estate and the success
both here and in France of these insu.
tutions has sufficiently shown how profit
able and safe such projects can be made
under good management"
We presume thai this refers to the new
trust, safe deposit and warehouse COM
panies which, though not organized for
the purpose, lend money on mortgage.
Effsrts to organize distinct companies TO
make loans on mortgages failed, both
10 Boston and Philadelphia, for want OF
the requisite legislation. But the oppo.
sition TO this legislation has been to us a
mystery. For, In fact, loans on mort
gage have been made in both cities for
many years past by insurance and trust
companies and savings banks, and now
constitute the largest feature in the assets
of these institutions. We know Of no
particular risk about them, and no reason
why they should not be increased and
encouraged to any extent that may be
needed.
We have long been aware that Eng
land, France and Germany contained
number of different forms of cooperative
a. al nj No kpnxup ~, ma
and we have endeavored TO call public at
tention to their utility and energizlng in
flueHee. Unfortunately, however, the
dread of expansion attached to these as
to every other species of new enterprise.
In London there exist finance companies
that undertake to furnish fiscal aid 10
great contractors, business that has be-
come colossal IN England, and that can
not be carried on without such aid dis
count companies that are mainly intended
for the accommodation OF tradesmen, and
other organizations with which we are
not familiar. The finance companies
have been held responsible for the tre-
mendous Overend Gurney panic because
so many Of them were wrecked but we
think without any degree Of justice, for
in such a time II would be impossible to
realize upon the collaterals held by them,
anu LAtH luuoh uhNG uNIu AlNNNh1A1 III
trouble unless they held great reserve
This organization of credit separates
the banks of circulation from the vast
operations demanding the employment OF
so much active capital. Indeed the
various features of banking all seem 10
ne going OF into separate Institutions.
There are circulation, running deposits,
loans upon current credit, loans upon
collateral, loans upon mortgage, safe
keeping and the sale OF bills Of exchange
and the supply Of the market with coin.
/ The waTehouslrg companies came into
existence to supply an actual want, the
loaning Of money on warehouse eertid-
Gates, which is. in fact, only loaning
on collateral. The safe deposit COM
pluies In like manner came into ex-
istence through neglect Of the banks TO
Insure special deposits. And the trust
companies appeared because their busl-
ness was not covered by the banks at
all and for the same reason loans upon
mortgages have been made by all sorts ef
companies. Neither the safe deposit nor
the trust companies distinctly cover this
business as a main feature, and hence
, the French organization Of mortgage
companies.
Whether the organization Of separate
, finance companies TO anofd Rld 10 great
/, contractors Is advisable this time may be
, q question for discussion. But that mort
Z gage companies have long been needed
we read in the enormous amount Of mort
s~es Ls.4innss 4 mo hg avisiing companies
not raised for the purpose.
Tne writer we have quoted applies the
, formation Of such institutions to the aid
of the farmers. If we take the South
, as an Illustration We will see the i'm.
/ portance Of the principle. In that section
! the assessed property is small, while the
amount Of real estate in which capital is
/, locked up is immense. Now, If In such
i cities as Louisville, Nashville, Savannah
, and Mobile mortgage companies were
i organized, they could infuse new life and
. energy into the southern agriculture by
furnishing the farmers and planters with
, active capital upon tue basis OF real estate
mortgages. This was one OF the chief
means by which the West attained Its
, sudden and remarkable development
i The farmers borrowed money upon mort
: gage, improved their farms, raised larger
and larger crops, and paid of the mort
! cages with the proceeds.