New-York tribune., 1906-05-10
TO LEND HALF VALUE.
REBTTTLDING Plans MADE.
Company Scith sI0,000,000 Capital to
Finance Ne5c San Francisco.

,,o Dlans for financing the rebuilding Of San
Francisco. which have been the subject OF ssVerai
conferences here within the last few days between
fnancIers Of this city and OF San Francisco, are
now assuming definite shape. II is purposed TO or
ganize a bond and mortgage corporation, It was
authoritatively said yesterday, under federal
charter or a broad state charter, empowering the
corporation 10 guarantee the principal and interest
OF bonds issued by it and secured by ten-year
mortgages on San Francisco property.
The company will have capital OF probably
s1OOooOOO This capitalization, it is thought. VIII
be sufficiently large to warrant the company In
underwriting s5OOOOcoO bonds.
The rev company will not concern Itself Waih
residential property but will devote itself eSciu-
sivey facilitating the erecting OF steel structures
II man I'm San Francisco owns plot or Iaho
worth $1,OOO.OOO and desires to erect upon y a
81 100000 steel building, the corporation Will lend
him $1OO0O00-that is. its policy will be 10 make
loans to tho amount OF 30 per cent OF the compned
value OF the land and the proposed building taxing
mortgages on both The mortgages VIII bear ota
or per cent interest. The bonds based upon them
and guaranteed by the company win carry per cent
interest. the difference of y to per cent repre-
senting the compensation to the company for It's
guarantee
These per cent bonds will be issued seriaiiy'
and will be sold TO life insurance companies WHICH,
although they might not feel justified. under the
circumstances OF the recent earthquake. in making
loans direct at this time for rebuilding operations w
San Francisco. would. IL is understood nnd no %"
lection to investing in guaranteed ooligations OF e
Bond and Mortgage Corporation; TO trust COM
onIos which would offer them to the public and 70
Individual investors Il has been cOmpetenty esu-
mated that about sSOO.OOOOOO will be required for
rebuilding the business part OF San FRANCISCO anu
of this amount, it is expected, the new corpotaon
will be able to supply from S0'CV!OO 10 slOVVOrO'
issuing additional bonds after 1t has placed tue
initial Ss0OOOO0O of such securities One OF the fea
ures OF the plan is the creation Of sinking tu"u'
for taking up the bonds as they fall due.
The new corporation according TO the ideas Of Its
protectors is to be expedient for meeting
present need and not a permanent institutOh' anu
its life may not exceed that Of the last issue or s
bonds The directors will be principally New YORK
and San Francisco men, the latter entering tns
board as representatives OF large San FRANCISCO
estates or as heavy individual property OWNERS
Some Of the most important San Francisco estates
have had practically their entire resources invested
in real estate there for example the bair es'ate'
Of which Thomas Magee OF San FRANCISCO VINO
has been one Of the men active in framing the oOHo
and mortgage guarantee corporation plai' Is 'iiS
representative. These estates with the fuhuS 20
be supplied through the agency Of the new corpora
ton would be able soon to place upon their land
in the city structures the erection OF which would
give work to many people. and on the completion
OF which the estates would again become income
producing.
one of the points made by those interested in
the new plan is that the fire insurance companies
may be rather tardy in settling their claims. and
therefore an agency through which funds for re-
building the city can be promptly obtained Is
desirable and useful enterprise. The total insur-
ance on the Baltimore fire has been set at about
saSOOOO0O yet H. s. Black, president OF the United
States Realty and Improvement Company. said
yesterday that the insurance companies had paid
only about $1,OOOOOO Baltimore fire losses.
As bearing upon the decision Of the organizers
of the new bond and mortgage guarantee cor
poration to lend money for the erection of only
steel structures the following extract from let
ter written to Mr.. Black by John B. Parish, a
Denver mining engineer. is OF interest Mr. Parish
was in San Francisco during the earthquakes OF
1855 1858 and last month. After the recent earth
quake he made his way first 70 the scene Of great
est destruction, among the brick houses built in
the 70's. He says in part:
Before the fire reached them went through
number Of the large steel structures that had re-
note that in case were they seriously injured.
Following this inspection, which included some
half a dozen Of these buildings, the fire swept
through all Of them, burning the entire contents.
Even this added test did not serve to destroy the
strength of the structures. and believe that In
as they were originally am now thoroughly con-
vinced that the best method Of building for San
Francisco is the steel structure, with modern ire
proohng. II steel shutter could be inserted in the
wall above the windows, to be lowered at the time
of fire, these buildings would offer a front that
trail business part Of San Francisco.