The Republican. [volume] (Oakland, Md.) 1877-current, 1885-02-07
HOW THE SCOT INVESTS.
BORROWING His Neighbours Money at -Four
Per Cent. and Lending it at Ten.

INV LIE SCOl INVES ..
Borrowing His Neighbours Money at -Four
Per Cent. and Lending it at Ten.
"The canny Scot would have an in
vestment company for mortgages at the
North Pole or at the head of the Congo
River, if he found productive property
there" said representative of Scotch
syndicate, who handles millions of
money annually in this country. 1.-The
Scotch frugality is encouraged by the
proverb, The borrower We always have
with you, and the interest rates of this
country, especially of the South and
West, present such an attractive field
for Investment that there is no other line
of business of equal security that pre-
SCENTS the same opportunity for profit.
The Scotch were the first to recognize
the revival of industry in the South, and
In the past five years they have invested
millions there upon real estate mort
cages always on the country. They be-
Heve in SOIL not in bricks and mortar.
An applicant for city loan some time
ago was told by Scotch agent that all
he could have was thirty per cent on
the value of the ground on which
his building stood He protested
that his building was worth five times
as much as the land, and was insured
in first-class company. All an
swered the Scot, your building may
burn tonight and the insurance COM
pany may fail to-morrow-th where
would my security Dep This was con-
ser~atsfn ~sitH Il NenSean'T apf--vheR (
the applicant expressed hisdisg1st, tue
Scotchman said: 'Ah, weel, we dinna
COON to America to lose our money!
''Few investments have proved SO for
tunate for the Scotchmen as the mort
gage upon Southern farms. They
organize an investment company on the
other side with an authorized capital of
$500, 900. twenty per cent. of which
they pay in. Only first-class people,
whose names invite confidence, are
taken into this company, which, under
the limited liability act, goes before the
public with debentures bearing three
and q half or four per cent. interesi
which they have authority to issue up
to the limit of their authorized capital.
They get $4,000 there very cheap. and
they loan it out in the South and West
at ten per cent. net, the borrower pay.
ing all expenses and commissions.
what security is requred?"
productive lands under cultivation.
The loan is based upon about forty pei
cent. of a conservative valuation, in est,
mating which no account is made Of
improvements, fences, houses. or timber
or marsh land, but for the greater secu-
rity all of these are taken in. The
borrower gives a deed of trust, and this
is put on record before he receives the
money. Then when the final certificate
of the attorney is received all the debts
against the property are first paid from
the amount of the loan, and the re-
mainder is handed over to the borrower.
What does the investor get as his
evidence?n
"a neat little packet of ten per cent.
| notes, signed by the borrowers in the
presence of witnesses. These notes rep
resent the interest as it becomes due,
and the principal is represented by
/ series of notes of equal amount, one OF
which must be paid each year. The
/ Scotchman's theory is that if you want
| a high rate of interest it is better to
| have the principal paid in installments,
and that the borrower finds is easier to
pay fixed amount year than to keep
! the accumulations intact for the matu-
| rity of the loan. The notes are collected
by the agent of the investment compa.
ny. The methods employed are so care
full that in large business involving
/ millions there has not yet been a fore.
/ closure. The investment companies
after paying four per cent. upon theiI
debeutures, have six per cent. on fouI
hundred thousand dollars to add as div.
idends to the ten per cent. which the
subscribed capital itself is drawing. Its
! as slick a l.ssiness as man ever devised,
and while the Englishmen are fussing
with our railroads, the keener Scotch.
men see that the farms of this country
! are the true basis of value, and they ACT
accordingly. ~. Y. SUn.