The age-herald., 1898-08-28
VALUE OF CITY PROPERTY
In the State of Alabama Increased by
 Building & Loan Associations

In discussing the utility of building and loan associations, a prominent citizen Of Mobile some time since said: ''The most noticeable effect the lending of money by building and loan associations has had in Mobile is the fact that il has brought large amount of the money of individuals into the market in search of loans on the same class of property that the assoc1a- tions lend on. Before these associations began to do business here it was very dif- ficult to borrow money on even the most desirable real estate. Persons who had money were not disposed to lend it on real property because of the slow process Of converting this class of property into cash in case the loan was not returned when due. But since the influx of the money Of building and loan associations all this has been changed. People with money to lend have realized that they could place their money on real estate security with the confidence that if the borrower was not able to meet his obligation when 1t fell due that it would not be necessary to sell the mortgaged property under the hammer but that the money to take up the mort gage could be readily obtained from one of these associations. The effect of their doing business here has been, consequent ily, to make real estate what 1t was not De- fore. viz available collateral for loans.
 The ideas suggested by these remarks have found abundant illustration in nearly all the other towns and cities fn the state. Real estate is convertible into cash less readily than any other kind Of property. For unimproved property there cannot be said to be any certain market at all, while for improved property the market in few places is ready one. Then, too, real es- tate transactions are of slow consumma- ton, and but a small per cent of them are for cash. These are the facts which at one time made money-lenders slow to place their money in real estate mort gages. The fear that it would be neces- sary for them to receive their money promptly when due and the danger that their debtors could not meet their obliga- tions on time would render 1t necessary to resort to the tedious process of fore \ closure and of finding a buyer for the property in order to realize on their mort gage debts, caused monied people to avoid this class of investment. These considera- tions have not, however, affected loan as- sociations in the same way they have par ties not regularly engaged in the business of lending money. In the first place, if a loan is not kept up. as long as the margin of security over and above the debt is ample to cover accumulations of interest, they willing to let the loan continue without foreclosure, as they would not better themselves by taking their money out of such loan and placing it in an- other. And in the next place, where fore closure is necessary. they are able. having an income from other loans and other SouTCeS WItn WHICH to H1dke new iOdHS. t' carry. without embarrassment. such real estate they are compelled to foreclose until a buyer for 1t can be obtained, re- garding the rents in the meantime as in- terest on their original loan and the pro- ceeds of ultimate sale as reimbursement for the principal.
 Building and loan associations have too, furnished a regular and certain source of supply from which money could be ob tained by those having the proper securi- ty. It has by no means always been the case that because a man had good secu- rity he could borrow money on 1t. Some one with the money, who was ready and willing to lend 1t. could not always be found. In the smaller towns such money as there is is tied up in farming and mer- cantile operations and interest is high. As a result a man who wished to buy or build a home in such a place. though the property might be of well-established val ue, if he did not have enough to complete the transaction. would fird 1t difficult to borrow the balance requisite to carry out his plans. Such loans are. however, much desired by loan associations. and as a re- suit there are innumerable homes in small towns owned by well-to-do merchants and farmers who bought or built them with money which they obtained in the main. from building and loan associations. and which could not have been obtained else where.
 In the cities of the state these associa- tions furnish a steady supply of money for loans on property which is really very desirable security. but which is not reach ed by any considerable extent by any oth- CT class of money lenders. These are small homes. While this class of security is excellent, yet the loans desired on 1t are not as a rule large enough to be handled by the so-called mortgage companies. nor of a class appreciated by the individual lender And, 1t may be added, the supply of money to lend held by these two latter classes is by no means sufficient to meet the demand of desirable borrowers.
 The advice to neither a borrower nor lender be certainly does not apply to mod ern business conditions; for men who bor- row do so as rule because they find that they can use the money so obtained at a profit to them greater than the interest they pay. and those who lend with caution rarely fail to obtain a return on their iu- vestment. Money-lending, then. is busi- ness-a necessary and useful business and the above are some considerations which bear on the phases of this business which have been defined and developed by building and loan associations.
 w. V. M. ROBERTSON.