New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1896-07-03
GERMAN EXPERIENCE WITH MORTGAGES


To the Editor of The Tribune
Sir: According 10 the United States census 'ne
,n1oh.e.,ncss secured by mortgages on January J.
1880 was s. A9 l43 43l acres at an average i"'e
OF 1886 per cent and $3.50 .5A on "ts at an aver
age interest OF ZIG per cent. Now, as e'e'!'o''
knows. it is rule In this country '""' "o' 'e""
run only two 10 four years. and that they nave ~
be renewed after that time. generally by PaF'"s
commission by the debtor extending from 10 . per
cent Thus the average interest IS raised et leaS' 10
SIC end SIG per cent resp rctvc.y yearly
Tho average interest paid on st-class mortgages
in Germany is aboIt 10 per cent, lnciui'hs 10 ~
y PER 10 the sinking fund
The rate the mortgage companies pay u 'non
bonhoders ranges from to per cent os per cent
being the most usual rate.
The German property owner prefers 10 'aNc ''''
loan II he needs such. from company WHO" she'
him The choice either to refund II In certain tine
agreed upon or to refund It by sinking fund in pay
,ncnts Of -s to y per yearly. while the small
CAPITALIST who had formerly only the opportunity 10
put his savings in savings bank, favorS no" the
morris gage bonds by which an acceptable rate Oh inter
est Is guaranteed. leaving him besides the chahce Oh
gaining a bonus
The German mortgage companies are unable to
satisfy the demand their bonds and there is al
Ways u large abundance OF money in the market
waiting for investment in mortgage securities
There Is 10 reason whatever why what has been
ACCOMPLISHED with 20 wonderful success In Ger
done here. 1t Is safe TO say that solid mortgage
company established after the German style, would
md no difficulty In placing mortgage bonds NJ rate
OF per here well as abroad TO an extent 10
enable II satisfy All justihaDle want OF credit or
Guiding "a per cen; for the sinking fund.
.sispIosng, now, "A farmer has a mortgage or *oUJ
on his property. He would. under the present CIR
stances shown above. have TO pay $50 per
cent or s4ls yearly The mortgage company would.
tho hlghs ask Of him only per cent. Including
per cent sinking fund-that ~. $500 Besides the
t15 70 tho sinking fund, the farmer would save yearly
would take In this way forty years, the farmer
woen In that time not only have repaid his DEBT. but
would have saved besides forty times $b ana inter-
about $3.50 at east. Should he prefer 10 use
his yearly savings for Improvement OF his property.
he would In less than ten years double the value
OF the batter.
sarly high interests amount with the farmers 10
? 10 per cen; of 81 ~ isi, o. sal&gJ with the
lots 2lG cent or SSSu,J3 )i. or w.
COS 4BO; together, TO $685. ,29 .3S2
Iiy the speedy growth ~ cities and towns and the
cultivation OF Land II is safe to say that. since lH~.
this figure has been raised 10 At lcns, f5O,ONwJ
II this $50 $4,000 could be used IN another ari use
ful way the economical He OF the country would
soon become n different. n better one. The farmer.
prosper; the HORSEPOWER would not be obliged any
LONGER 10 press the poor workingm.n for unreisln-
able rents and'th many millions OF dollars now ~
ns IDLE won.l raise our industries AM commerce 10
standard bcitting the greatness ana wealth OF the
country
II the proper.y-owners would only subscribe one
tenth or cent Of their mcriBagei debts. they