The gold leaf. [volume] (Henderson, N.C.) 1881-1911, 1892-06-30

A NEW PLAN

/ A NEW PLAN
OF RAISING MONEY ON REAL
ESTATE.
Hon. Edward Atkinson Suggests How
it May be Converted into Bankable
Security.
The following interesting COM
munication from Edward Atkinson to
the Manufacturers Record presents a
novel plan for increasing the value of
real estate as security for loans:
BOSTON, June E.
Editor Manufacturer Record:
observe that an article which
lately wrote in the Century magazine
upon the Torrens system of registering
land titles has attracted the attention
of General Alexander and others of my
Southern friends. l may venture to
call attention to method whereby
land may be converted into security
on which money can be borrowed from
banks and bankers without the neces-
sity of making conveyance OF the
land as security for each loan. 1t is
plan which has not vet been adopted,
and to which there may be objections
unknown to me, but in all but one
respect the suggestions that l make
are part of the common practice in
many places. especially in Philadel-
phia and Baltimore. What 1 suggest
is this:
The conveyance of land by the
ordinary methods is by registry of
deed, under the guarantee of a little
insurance company and on condition
of the payment of a ground rent with
out any promise to pay principal
lump sum secured in part by mortgage
in the usual way. do not propose
perpetual ground rents teminable at
the option of the buyer or lessee on
given notice, not terminable at the
option of the seller or lessor. 1t is the
common practice, notably in Philadel-
phia, to sell and convey land subject
to terminable ground rent under an
insured title to capable men, who, be-
ing in good health, also get their lives
insured for an amount equal to the
valuation of the land. The lessees
then join building society, and thus
procure the means for building
house on the leased lot, becoming
ultimately their own landlords by
paying up their assessments in the
building society and by ultimately
compounding the rent by payment at
valuation in one sum either in install
ments or in one payment.
The plan which suggest is to add
one single element to this method,
namely, that the obligation to pay
rent upon the land should be repre-
sented by what may be called rent
oriental certiacrtes, to be regis
tered at the Office of the title insur-
ance company, containing provisions
both in the conveyance and in the
rental certificate that on a given notice
at certain period in. advance of a
payment of rent at such Office of reg
istry the lessee of the land may be-
come entitled to purchase each or all
of these rent certificates by deposit
ing at such Office OF registry given
sum of money for each certificate.
Example: Let it be assumed that
John Smith buys or leases from James
Brown lot of land of which the
valuation is $1,000, upon which he
build sa house valued at $4,000 The
ground rent is to be 500 year. This
rent is represented by ten registered
certificates of rent, each of Sc per
annum, provision being made that
at any period three months in
advance o. any part Of the rent bef
coming due, John Smith may file a
written notice at the registry that, on
the payment of $1oo, together with
the rent then due, he desires to be-
come the owner by purchase of rent
certificate No. I, and SO on through
Nos. ?, 3 to 10. When he has
purchased all the rent certificates at
S1oo each lie will have become his
own landlord. These rent certificates
constitute a lien upon the land as good
to him, John Smith, as they are to the
original holder, and he need not can
eel them.
Or let US suppose that John Smith,
being the owner of land free Of encum-
brance, upon which his house stands
and which constitutes his farm,
executes rent certiictes recorded upon
that farm with trust company, title
insured, and himself becomes the pos
SCISSOR of such certificates, would not
these become the first lien upon the
land, not as mortgage but as lien,
subject to foreclosure if the rent is not
paid? Would not these transferable rent
certificates then become available to be
deposited with banks, bankers or trust
companies as security for temporary
loans from season to season?
l am not lawyer and cannot tell
what technical difficulties there may
be in the way, but this seems to me to
be the easiest way, under our present
form of registry of title by deed, to
put land into form in which it can
be assigned as security for temporary
loans without going through an
examination of title, and without the
execution of papers Of conveyance and
mortgage each time that a loan is
made.
In presenting this subject, permit
me to call attention to the fact that
the craze for more depreciated money