The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-09-20

A scheme Devised whereby They
Might BE Available.
Chicaso I2oyds and Mortgaees


The present heavy deposits in the agri-
cultural States Of the West once more sug-
gestS the ACCESSIBILITY IL not necessity of
formulating a plan by which banks could
advance money safely on proper real es-
tate mortgage coilaterals. AS the season
advances the deposits in these banks will
become unusually heavy and already In
stances are on record where deposits have
been refused on account of the lack of OPP
portunity to employ the funds prontaby
In many OF our Western States real es-
tate is the best collateral a borrower has
TO offer, yet under the existing laws the
banks are precluded from using mortgages,
mainly because a real estate mortgage Is
not a very available asset and not readily
converted into cash. The recent period of
depression and the panic Of 1898 have
shown that banks cannot afford to handle
anything not quickly convertible into
money.
A method therefore must be devised to
put mortgages in such shape that they are
on par with railroad stocks and bonds
or bank stocks and municipal securities,
which enjoy the benefit of an open market.
A banker, who has evidently given much
thought to this subject, has arrived at the
following conclusion, which, IL practicable,
would offer much-needed relief This gene
tleman suggests the Issue of Interests
bearing bonds on real estate, in denomina-
lions of, say, $25, $50, 500. 500, $1,000, any
one who owns real estate either farming
lands or city property, to be permitted to
issue bonds OF the above denominations,
for the purpose of using as collateral to
secure money or merchandise, or the bonds
to, have the force of q Judgment lien, in
OF a suit IN court. In this form, banks or
individuals can make either call or time
loans, ana be aple TO convert them into
ready money at their market prices, at any
time, without process of a suit in court
The long process of suits in court or
mortgages, units this class OF collaterals
for banks.
The bonds, as above mentioned. to be-
registered in book to be kept by the coun-
ty clerk. Each bond should bear county
seal. Each bond, bearing county seal
would be evidence that no incumbrance ex-
listed except shown in face OF bond, which
should state amount OF mcumbrance that
had been issued prior to this bond Each
bond should be numbered
There should be limit to such bonds
The face OF the bond should state what the
property is assessed for taxation such
value to be determined by the county board
of supervisors, and not more than the as
sessed value should be issued on said real
estate-parties who would buy trade for or
loan money on such bonds would know
their value and would be protected The
bonds TO run for a term Of six or twelve
months or longer time If desired, at the rate
of per cent. per annum, or whatever
sented for renewal at the expiration of their
time If not taken up and Cancelled. If not
presented for renewal at their expiration
said bonds cease bearing interest This
would make a convenient form of collateral
VIII IN could be used In all business transact
Z 3 and would have a staple and market
vatrLe in the locality of their issue. 1t
would also relieve the individual of having
to ask his neighbor or friend to indorse his
paper III Dunk lOf Il lOdn as ne GOuiQ use
his own collateral for security.
During a depression or a panic the pco-
p me frightened and take their money
1ank so that the banks are afraid
Ke loans for fear that their Deposit
could call for their money; therefore
they have TO do the very thing that will
contract the currency and make money
scarce-keep the money ia bank to enable
them TO meet the calls of their GcpOsitOrs.
THE privilege TO issue a small denomina-
ton bond would furnish local currency
that could be used instead of money.
1T represents value just the same gold
or silver; the bond has a redeemer just the
same as the bank note or paper money.
This form OF collateral or bonds would
be convenient for farmers and local trades
men just the same as railroad stocks and
bonds. State. county and municipal bonds
are convenient forms Of collateral for their
owners to secure loans on"
We reproduce the plan Of this banker be-
lieving that the time is fast approaching
when the present form Of mortgages VIII
undergo a radical change In this country
and that this country viii gradually con-
form more after the methods in vogue in
Europe There is no valid reason why
mortgages on real estate should not be
equal TO railroad securities or municipal
bonds In the eyes of the discount commits
tee. and the present agitation appears PEE
culiarly timely and promising OF satisfac-
tory results.