The sun. [volume] (New York [N.Y.]) 1833-1916, 1910-04-19

practice n unable 10 hold his own IN the
changed industrial composition.
The borrowing facilities Of individuals
and firms are limited compared with thoso
Of the corporation. which may add 10 its
capital by the issue Of credit securities.
Incorporation IL therefore resorted to.
provided there u a market for such -
curities. The extent of the market
depends very largely upon the degree OF
, concentration % the bankinR business
and upon the volume ~ stock exchange
| speculation. In recent years the wealth
! ~ the country has grown rapidly and
capital has been ofered freely for invest
nent. while giant banking houses and
huge stock exchange activity have been
developed, all II which has tended toward
the increase of corporations not only In
numbers but also IN sire This tendency
has augmented credit on an unprece-
denied scale. for the typical corporation
~ to-day is-'Ies bonds or preferred stock
against the full value of its material plant
and IN addition common stock covering
the good will OF its business
Credit imitation in connection with the
! financing % corporations was a universal
movement Characteristic % the decade
In all the leading industrial countries.
Credit 10 % course purchasing power. and
the eject % . growing volume Of credit
is to advance commodity prices.
The RsSesutIea IN shs real Estase NArGes.
The Incorporated company has become
. factor II importan in the real estate
market wholly within the period % rising
commodity pric~e. I'm 1907 the real estate
operating company was all hut unknown
IN New York city. The firat local company
% this kind with notable financial backing
was Incorporated In Isee. In 1901 there
were upward of 900 real estate corpora-
tions in the Borough of Manhattan alone.
/ The numerical growth % realty operating
I companies ~ sympt omatic Of q change IN
business methods by which the value Of
real property has been on the one hand
vastly increased and On the other trans
/ formed into liquid capital. This change
has come about mainly through tho in
ssrImensAliSy % the title insurance com
panies.
The first title insurance company wss
( ESTABLISHED IN N@= Yc-k IN Issa- Al that
time the purchase Of real estate was q
slow and hazardous Transaction. Law
! firms required on an average ~ least
thirty days in which % search a tide. and
when the search was completed there
a. no assurance that some private claim
nr public ass~sssaent had not been over
looked. The mass Of records affecting
real estate in the various public offices
Vas in q chaotic state and vas. moreover.
incomplete. Important documents. in
Guiding especially old and valuable maps
indicating boundary marks. had disap-
! cared altogether. partly by theft and
partly through neglect N restore worn
out papers
Tho conditions in New York With respect
Tn real estate records were typical oG the
country - a whole. The business OG title
insurance consequently met q universal
need and has grown With astonishing
rapidity. Title insurance companies are
nos 20 he found everywhere. and inaurs
not only urban real estate but farm land
A. we'll They have invested millions of
dollars ia making abstracts % Official
records and in providing for their own
plants Information missing in the public
r-cords The result IL that any one % a
number % such companies in New York
city. for example. will search and insure
a title in to enty four hours
The business Of the title companies wAa
ing real estate stiles. IL was eventually
-Nt~nded "a include the inSIring Of mort
cages That is. the companies GUARANTEES
b"th the principal and the interest On a
mortgage Iaan. Indeed. the greater part
Il their income 10 derived now from s-llinR
mortgages q private investors. estAtea.
trust companies. life ins a SDce companies
and savings banks The Ut. companies
- q
sale 10 real estate mortgages Some oG
'h- biR metropolitan concerns have branch
Offices IN all parts of the United states and
receive orders from abroad through the
mail The most recent. and IN some re-
-p.cts the most important extension 81
the mort gage investment business 81 the
title companies ~ a development II the
last halt q do1en years. IL compris-~ the
making 81 building loans and the issuIing
81 guaranteed mortgage certificates Of
small denomination
our local title insurance companies
have. then. e late created q national mar
k-t Tor New York real estate mortgages
and mortgage certificates. while similar
companies m other cities have likswis
extended their spheres Of influence.
After the panic. when distr'Ist oG banks
Nhi stsh nArhet eeN'lrlues - A. at tNa
hes ht. private investors all over the
Unit-d States bought guaranteed mort
Cages and mortRag. certificates from
New York companies These conse-
au"utlv had plenty Il money TO lend on
real estate. while the savings banks and
life Insurance companies were obliged TO
withdraw temporarily from the mortgage
loan mark - The comparatively high re-
turns on these guaranteed Investments
"a Ter cent u per ~ explain in a
measure the failure % the general public
80 return u the stock market since the
panic.
The improved facilities Furnished bv
title COMPANIES encouraged the develop
Tn~nt ~ a professional speculative ina rket
for real estate. So long a. the bidding
was limited virtually To individuals the
capital employed IN the composition was
comparatively small and prices we're
affected only TO a moderate extent With
the multiplication u operating companies
In the last ten Year, the capital available
for competitive buyinG has been increased