New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-12-07
ASKS STATE @. K.
OF ALL SECURITIES
E. B. Boynton Requests
Public Audit and Out
side Appraisal,
BIG REALTY FIRM
WANTS QUICK ACTION
American Real Estate Company
Willing to Submit to Fair
Regulation.

The recent recommendation OF the state
Banking Commission that real estate cor
poratons issuing securities be placed I'M
der its supervision has been received more
seriously by real estate operators and the
inve sting public generally since the New
York Real Estate Security Company went
into the hands Of a receiver. The Oldest
and one Of the largest operating com
rsnes selling real estate securities. the
American Real Estate Company, in an
interview given to-day by its president,
Edward 3. Boynton, takes its stand
openly not only for the state supervision
of corporations issuing real estate sccuri-
ties. but for all corporations, whatsoever
their nature, issuing securities for public
sale.
Mi. Boynton believes that there should
be made public whenever called for
thorough audit OF the books by cert-
fled public accountants and competent
outside appraisal of the assets by recog-
nized authorities Of every security Offering
corporation, no matter what the security.
He points out the injustice Of placing
real estate corporations alone under the
mcnt, when as matter of fact. the losses
from real state securities have been prac-
tically nil as against those suffered by in
vestors in railroad, mining, oil and indus
trial stocks.
The bill advocated by the state Banking
Department. il is said. will be pushed Wig
orously in the Legislature this winter, but
il is likely to meet with determined oppo-
sition from real estate men If ii is framed,
as il is at present. to embrace real estate
companies issuing securities only and still
leave the promoters of wildcat mining.
railroad, oil and industrial stocks TO mulct
the public at Will. There has never been "A
Northern Pacific corner in New York real
estate. New York real estate cannot be
manipulated as was steel common once
upon a time. The New York Real Estate
Security Company did not fail for $500
600 or for s2O.OOo,Ooo. If it had been able to
borrow few hundred thousand dollars it
would not have fallen into difficulties. and
every piece of its assets represents tanGi-
bic. income producing property. Real es-
tate may fall i'm value, Lut it cannot blow
I'd. IL cannot be moved, it cannot be salt
ed il cannot be constructed out Of paper
and printers ink.
4 strong factor i'm any legislation AZ
fecting real estate corporations Issuing
securities will be the New York State
Real Estate Association. This organlza-
ton. whose headquarters are now in New
York CITY. William n. Moffltt, Of the
William H. Mofitt Realty Company be-
ing its president, will oppose any measure
which places restrictions only on real
estate corporations. Inasmuch as 1T has
local boards in all the large cities OF the
state, 1t can command greater influence
I'm legislation than any organization re-
stricted in membership TO New YORK CITY
IF believe the time has come, said MT.
Boynton in his interview, when all cor
porations doing a legitimate and conserV-
ative business should join together Tor
the enactment of laws that shall properly
protect the investor. Some recent hap
peninCs I'm the real estate field in New
York have prompted numbers of sugSes-
sAAas to the effect that protection should
be given investors in real estate securities
by bringing the business of realty cor
porations that sell interest bearing bonds
under supervision of the Banking Depart
ment Of the state, and so far as the
American Real Estate Company is con-
cerned / want 10 express our entire APP
proyal of this suggestion and our willing
ness to cooperate in any we'll considered
efforts to bring it to pass. Nothing could
do more 10 establish a healthy tone in the
real estate security market than proper
suneryision of the securities offered there
in We regard II as an entirely proper
function of the state to protect its citi-
10 l.
HE offerings Of all sorts. There are sew
eraI fundamental rules In the way OF en-
forced publicity which we feel should be
exacted OF every security onering cor
uoratIon. First, thorough audit OF its
books by certified public accountants OF
standing. and, second, competent out
side appraisal OF its assets by recognized
authorities. Furthermore, II should De
punishable TO misstate facts concerning
securities in advertisement, circular mat
fer or letters descriptive OF same All
such advertising matter should be issued
subject 10 the supervision Of the proper
state authority.
"In this connection, however, the fact
should not he lost sight or that the
amount of money lost by the investors Oh
New York State in unreliable real estate
securities is negligible in comparison WIN
the loss suffered by investors In otner
lines The vast sums which have beer
lost in mining stocks. oil stocks irflga-
ton. industrial, railroad and public ulillty
promotion OF all sorts would make
staggering aggregate, tremendous puf-
den OF loss against which the citizen mas
. right to demand protection from the
government.