Los Angeles herald., 1908-02-02
SA WINGS
TO BRING OUT
ACTIVITY
BANKS HOLD KEY TO REALTY
SITUATION
MAY ABOLISH WITHDRAWAL NO.
TIcE SOON
Proposed That Savings Banks in Con-
cert Offer Large Amount at
Low Rate of In
terest

StraWs in the realty wind show that
it is blowing in the direction of revival.
These straws have been increasing
since the LIST of January, and the new
est one is the promising outlook in
financial circles. OF course, it has been
known for two weeks that money was
rapidly becoming "wasier." as is the
expression of the counting houses, but
this did not mean that there was pres
emit ability to finance even the safe
minor realty transactions.
The mainstay of the realty market is
the home builder. On his ability TO
build for himself much of the activity
of the market is dependent. Because
he has not been able to get money at
the ordinary rates of interest-6 to
per cent-the activity in home build
ing has been reduced almost to mini
mum. But now the indications are that
within two weeks money will be avail
able for building purposes at rates OF
interest that normal financial condi-
tions permit.
Under present conditions in Los An
geles the savings banks hold the key
to the loosening of money for realty
purposes Since they have required
sixty days notice from depositors who
wish to withdraw the activity of home
building has been Interrupted. There
has always been an opportunity to bor-
row on real estate security, but not
from the savings banks. Others who
were loaning were asking as high as
per cent interest. The savings banks
could not well require notice of with
drawal from depositors and in the next
breath undertake realty loans, regard
less of the rate of interest Conse-
uuently the man in moderate circun
stances who had saved for home felt
that if he did withdraw his savings
and buy on what was close bargain
market, whatever loan he must make
would be under the most disadvan-
tagioue conditions. The unanimous
Judgment seems to have been to let
things remain as they were until the
stringency was relieved.
Savings Banks May Act
Already one savings bank has adver-
tised that 1t is prepared to make loans
on real estate. That is the forerun-
ner of similar announcements by other
savings banks, though yesterday none
was prepared to say when such policy
would be adopted
There is reason to believe, however,
that within two weeks the savings
banks will abolish the requirement OF
notice for withdrawal and Will then
be ready to offer money in restricted
amounts for realty purposes. An offi-
Ger of large savings bank said yester-
QaV that IL was MS Dtiicl that liz
several large savings banks should CO.
operate in THE policy to be pursued
and that if such cooperation was
brought about an adequate sum-say,
from 100000 to $1,000, 00O-be made
available on real estate security IN
amounts not exceeding $4,000. In this
way the money would be distributed
and would be Joined with amounts now
on deposit waiting for just such an
opportunity.
Money at Normal Rate
1t was his idea that this money should
be put out at or 61a per cent interest,
and in this way ii would operate to
reduce the rates now asked and inure
to the general good. By abolishing
the notice of withdrawal the savings
banks will release millions in what are
called the and per cent accounts,
and a large proportion of this money
would at once seek real estate invest
ment In this way it would operate to
restore stability and activity to the
realty market and stimulate the build
ing industry 1T is wonderful" said
this banker, Ito calculate just how 81
released from these accounts will be-
come so active that 1t may serve the
purpose of several"
Real estate during the past week has
not been marked by the closing of many
the presence of an intelligent inquiry
for land of good grade and for prop
erty that possesses intrinsic invest
ment value. So far as the dealers
themselves are concerned many of
them have advanced many transac-
lions Just as far as they can, and only
await the release of the savings ac-
conuts to close them. In this respect
they have been active. Many home
seekers have made selections and have
accepted plans, but are not prepared
to absolutely contract until their saw
ings are in hand and the ability to
borrow money at normal rates is re-
stored
Acreage was the leading feature of
the realty market during the week, and
it has been the vehicle of many inn
portant trades In fact, acreage has
been the backbone of the market, as
men Of business in these strenuous days
have enough TO keep them busy in
their own affairs without seeking realty
investments. Nevertheless, a number
have kept the market under scrutiny
and have options on valuable building
sites down town which may be closed
in the next month. Many of the plans
for expansion and improvement that
were impeded by the stringency are
revived and will probably be carried
out in the spring.