The morning call., 1894-03-01
MONEY! REALTY.
Extracts From Magee's
Circular.
The Effect of Loans by the Banks
1t Stops Downward Prices.
AS to PavementS.

The following extracts are from advance
sheets Of Thomas Magee's Real Estate
Circular:
The fact that the city savings banks lent
s1316, GAL Oh city real-eslate in February,
and that private lenders took like mortgages
of the value OF S398, AGO, bad very important
effect OH the market last month. This effect
was far NOR indirect than direct. by put ing
STOP TO the belief buyers have had since last
May that prices would continue TO 90 steadily
down They believed this while the banks were
not loaDing, but now mat these Institutions are
again putting OUT money freely, this BELIEF mas
been greatly weakened If not disslpated
We do not OF course look for any I'M
mediate increase OF prices anywhere, but
they will be frmer fer really good
property than they have been. That. we
think. at present is the most that can be said.
Private capitalists desiring 10 lend thelf money
on city real-esIate mortgages now that the saw
IngS banksfaTe lending again, VIII md II much
more dIiilcultto secure loans, unless they take
those which the banks reject. Central retail
business real estate Is Ia pretty lair demand,
but BUYERS unreasonably expect II 10 pay 8 10
z per cent net, even When II Is situated III the
growing districts. where al ADVANCE in
value can be looked Tor II anywhere. Real
estate owners generally do not deserve any To-
crease IN value OF their properties, for they
have heretofore done little. and are now doing
nothing 10 earn such increase. The past, IN
which owners did nothing, and yel had their
properties rapidly increase IN value from
the labors ana expenditures OF others,
VIII not be repeated. Competition
north and south, ana the efforts OF
the railroad monopoly To crush san Fran
cisco. will prevent that. Our situation is a fine
one and our possibilities of growth very great,
but neither VIII do US much good while we DO
nothing. OF the 100000 raised TO main ain
The opposition via Panama-and raised with a
difficulty of which few have any conception
real estate owners as d whole contributed very,
very little. The largest owner here gave $1,000,
the next $1,000, the third $4,000, The fourth and
far mosl generous 100000, while seventeen
large owners out of twenty gave nothing. We
"A lf-nn
spirit; that yer does any good. Cities for
merly could grow and 40 nothing 10 IN legitl-
mate real estate increase. but herce oppo-
sition, the closest of cutting TO gamer I'D
trade and new railroads everywhere, render u
impossible for that sleepy policy any longer To
succeed.
Perfect ease now prevails in the real estate
money market, both with the savings banks on
The one hand ana with borrowers on the otDeI'
Every lot and building owner not III tne OUT
side districts, where values are even In the pest
of times uncertain quantity, can now borrow
90 per cent OF reasonable market VaIue; a
reasonable market value IN savings banks es-
timatlon Is about 70 per cent OF the market
value. On such conservative value they
then DO not loan over SO per cent. VI
course, they may frequently oyerstep this
marx, but they DO not mean TO 90 SO.
seven per cent, the savings bank paying
me mT9nrigsse tax, Is the ruling Interest
rate. The Hlb rnia Bank last month granted
one loan OF S250.000 at 61a per cent This
SHOWS now abundant money is with IT. for IL
mas al" dyS u GU tue pOlcy oil ms DaDk 10 sup
ply The needs OF small borrowers before il
grants loans 10 large ones. Ii also purchased
nearly million dollars worth of Government
bonds last month. The total number of all
city real estate mortgages in February was 462,
of the aggregate value of Sl,7I5,io5 while
227 releases were recorded, Of the value Of
$1,648, 4o2.
In street pavements, especially 10 bituminous
rock WORK, it is customary 10 say that street
contractors alone are responsible for LAYING
poor material and doing poor work but they
assert that the very worst Of them are no more
dishonest or more responsible for this bad
work than the average property-owneI. The
latter the street contractors say, cons antIv
drives them more and more TO do cheaper
work ana more ana more encourage dishonest
opposition in both basalt and biruminous ock
work. Even honest street contractors say they
are constantly forced 10 take work at price
hat renders the very best work impossible
The property does not seem to care how