Savannah morning news. [volume] (Savannah) 1868-1887, 1884-11-30
The Demand for Money.

reason WY capital should not 20 10 hlCl-
mOnd, Wilmington, Charleston, Savannah
and Mobile as easily and naturally as To
the Western centres. Money is always
ready for lending, and the circumstances
of the case-the risks-fnallY settle the
rate Of interest. II the South has failed
thus far to get capital as it wished il, the
fault is not with the North, but with the
wOuld-be borrowers themselves. Either
their security has been bad or they have
been unwilling to pay as high rates Of in
terest On the same classes of security as the
West, or thsir means Of reaching lenders
have been deficient. 1t is probable that
all three of these causes have existed
and have initiated against the South to
certain extent. Northern capitalists,
large and small, have constant applica-
tioEs for money to be placed in the West.
Many firms fnd their whole Occu-
patton in acting as intermediates for
Eastern investors and Western borrowers.
The estimating of values in Western real
estate and the establishing of sound legal
interests in it having been reduced almost
to a science, the Eastern lender feels as
little anxiety about placing his money in
this form OF investment, as in tirst-class
railway bonds.
1t is true that Southern lands, as init
mated by the Advertiser, nave not been
heretofore regarded as desirable security
for loans. But since the principle of law
has been settled that homestead eXemp-
lions may be waived by debtors, this class
OF security is regarded as gilt edge"
Considerable Northern and European
capital is now being invested in mort
cages on Southern real estate. Both home
and foreign money lenders, outside ofbanks
that confhe their business to commercial
channels, take mortgages on real estate
without hesitation. OF course farming
lands are placed at very low valuations
in some sections. but this makes the Sc.
curity the more valuable, as with capital
to improve and develop them their value
must greatly appreciate in the near fu-
ture. It is without the range of prOba-
bilities that they will 20 any lower. They
have certainly reached rock bottom.
The amount Of home capital is very
limited, and it is always sure of COM
manding the legal (contract) rate of per
cent. The foreign capital beng loaned in
Georgia. and other Southern States, is
also let at the nominal rate Of 5 per cent,
but tie charges attending the securing Of
the loans make it cost the borrower from
II to Il per cent. per annum. No sound
business man can afford to pay such rates,
except in cases Of great necessity. The
terms eXacted by these foreign money
lenders are more Objectionable to the eau
tious borrower than the prices demanded
for the money. Money is let only to the
amount of one-third of a low valuation If
the lands, for the term of five years,
and it is in the power of the lender under
the mortgage contract to consider the
whole amount due if the interest Is not
paid promptly at the end of each year.
Thus, in case Of any disaster or tempo
rary misfortune to the borrower, he is en-
tirely at the mercy Of these corporations
Of Shylocks. Some borrowers have al
ready lost their lands under such con-
tracts. 1t need not be considered sur
prising if Southern land owners decline 70
avail themselves Of this foreign money
except IN cases Of extreme emergency.
The Southern people need and want the
money, but they prefer not to have any
''pound Of flesh" in the bond if they can
help it. The AdcertiScr further says:
But underlying other objections there
is undoubtedly prejudice against South
ern investments on account Of the dis
trust Of tue laws under which creditors
must enforce their claims at the South.
Borrowers may be very willing to offer
good terms, but, if the lenders are uncer-
tain OF the possibility of enforcing their
legal rights in case of nOn-payment, they
will certainly not risk their money in
such quarters, no matter what rates OF
interest are promised.
Speaking for Georgia the AdrerttSer and
Eastern capitalists are assured that there
need be no distrust of the laws of this
State. They are not only effective but
simple, as regards the collection Of debts.
There is not only a probability but an alb
solute certainty of enforcing the cOllec-
ton Of properly written and executed
not only in the United States
Courts, but in the courts of the State,
benefits OF homestead and exemption be-
ing waiYable, and State laws having been
declared Unconstitutional. The foreign
creditor stands on the same footing with
our own citizens.
The rates of interest have been settled
for years, and are not likely to be altered
III TIC uEuA A0lulCs AAC ACE "a AeAlS 10 POA
cent, but per cent. is allowed by con-
tract, and this latter rate is readily OBJ
tanned, and is as much as any reason
able money lender ought to demand
for we'll secured loans on long time. 1t is
certainly as much as any farmer or man.
ufacturer can afford to pay and leave him
self any margin for profit.
There is no more question now about
estimating the values of Southern real
estate than Western, and the rates OF in
terest are as we'll established here as they
are anywhere. Now if our esteemed
contemporary knows of any capitalists
who want to lend their money at s per
cent. On unquestionably good security,
1t may say to them that Georgia will
doubtless be glad to have some of it, but
the terms must be such that sudden
illness or one short crop would not cause
the borrower to lose his land. Besides
this, there musSsbe no demands that alb
sOrb one-tifth, or more, of the loan before
it reaches the hand of the man who pays
the interest on it and mortgages his land
to secure it. There are already appa-
rently large amounts of ''Shylock" money
seeking investments in Georgia mort