Perrysburg journal. (Perrysburg, Wood Co., O. [Ohio]) 186?-1965, 1879-08-29
Loans on Western Mortgages.

In casual conversation to-day with
a real estate broker of this city who
mekts somewhat of specially of nego-
| tiating loans on Western farm proper
ties, your correspondent was informed
that within the past year there has
been marked falling off in the bust
ness.
The three moheyed tehters which
have enjoyed d monopoly of the busi-
hess are Boston, Providence and Hart
ford. The latter has had something
more than its propOrtionate share, as
manufacturing enterprises are dying
out, and the returns from the immense
insurance companies and other corpora
tions of large capital annually place
upon the market great sums of money
for investment. The savings banks of
the State until recently had large in
vestments in the Wert, but the Solohs
of the Legislature determined that it
Would be better to have the money de-
posted by the people of the State held
at home, to be borrowed for manufact-
uring and other enterprises. The re-
suit was that the banks have with
drawn from Western investments, and
the comparatively few loans now out
are those that have not yet matured.
In the flush days of Western loans capi-
tai was drained away to the West from
every source, and my informant told
me of even church society which put
about $4,000 into loans on farms in
Missouri, Iowa, and vicinity. This was
four years ago, and the larger part of
the money has been returned. In only
four cases (the loans were all small
ones) has foreclosure been necessary,
and these were In Iowa. An Immense
sum in the aggregate has been loaned
by individuals, but it is impossible to
arrive at any approximate figure. The
loans were, as a rule, negotiated by the
individual direct with some mortgage
broker in the West, and the transaction
was kept secret here, to the end that
local taxation might be avoided. In the
past, twelve per cent. has been re-
ceived on loans in Kansas, and ten per
cent. in Iowa, Missouri, Indiana and
Illinois, but at the present there is con-
siderable falling off in the rate of in
terest, in proportion to the decrease in
the Western demand for currency.
My informant states that the demand
is gradually decreasing as the West i'm
proves in financial prosperity and it
becomes easy to negotiate loans in
home markets. Eastern capital cannot
now get better than eight per cent, ex-
cepting in Kansas, where ten per cent.
is yet the ruling figure. Yet these are
tempting rates to the capitalists of the
East, where it is almost impossible to
loan money at anything like remunera-
tive rates.
1t is estimated that the annual trans
actions in Western loans, even under
the present decline in the business, will
not fall short of 800, 900, 900 per annum
for New-England; and at least one third
of this represents Connecticut capital.
Farm properties are in most demand,
as they are regarded as safest, and the
interest is usually more promptly paid
than on city mortgages. Loans run
from $500 to 81, OO0 on each property
loans larger than the last named figure
being comparatively rare, and inves-
tors objecting to loaning more than fifty
per cent of the value of the farm
more generally, only about one-third,
SO that the security shall be good be-
yond question. Instances of the pass
ing OF the semi-annual interest are re-
ported to be comparatively rare, and
foreclosures seldom occur. For exam
pie, the annual report of one of Hart
ford's largest insurance companies,
which has millions loaned in the West,
shows but a single piece of property
owned by the company which was
taken under foreclosure. AS rule,
the security is so ample that the lend
ers are quite willing to let the interest
run on.
County, town and city bonds are less
popular investments than in the past
for the few scattered cases of repudia-
ton have had bad effect upon ever
timid capitalists. Among the cautious
investors of this immediate section
there is tendency TO slide such bonds
off upon the New York and Boston mar
kets. Savings banks hold very few at
present-the Legislature in 1874 direct
ing that the banks should loan, in the
West only on the State honda of Ohio