New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-08-09
Those on Good City Real
ty Readily Cashed,
Says Morgentllau.
PREFERS THEM TO
GOVERNMENT BONDS
Believes Money Market VIII
Not Suffer Mich if Euro
pean War Is Brief.
By VI. MoRGESTHhU. JR.

In considering the effect Of the Euro
mean war on our New York City mort
gage market. we must not forget first
of all that this unexpected catastrophe
has fortunately come at the very dull
est period OF the year. Under normal
conditions business would be almost at
a standstill at this time Of the year.
II this war is rs brief as we have
every reason to hope, now that Eng
land and possibly japan have joined
the German foes, then | believe that
the actual effect on our mortgage mar
ket will be negligible. or course, I'M
der the most favorable circumstances
a war such as this will surely cause
great demand for money. All the for
eign nations have already put out war
loans. and in due course these new is-
sues of securities are bound to cause
rise in our interest rates. As these
new securities will sooner or later
compete in this market for funds, some
of which would be. invested in first
mortgages. | am inclined to think that
this will cause a gradual rise in inter
est rates.
On the other hand, it must not be
forgotten that the very fact that sucn
an impossible war should develop so
suddenly and involve practically all
the European nations ought to demon
strate the great superiority Of good
first mortgage investments over for
eign government securities. The ar
gument has always been held forth IN
favor Of these and other bonds dealt
in on the exchanges that they are SUI
pcrior to first mortgage investments
because of their ready convertlblllty
through the possibility Of sale for cash
at any time in the worlds markets.
The recent experiences in the financial
world, which have caused the closing
of the exchanges both here and abroad,
have demonstrated the fallacy Of this
argument. | venture to say that a
choice first mortgage on good New
York City property can be more readily
cashed and with less loss to-day than
any of the other securities which have
been purchased recently by investors.
It is very difficult TO prophesy the
probable effects On our mortgage mar
Ike. in the event of long drawn out
conflict. There is every evidence that
the financial powers here have the Sit
Uaton so well in hand and are cooper
ating with the government at Washing
ton so effectively that no great money
stringency will develop. AS there will
be very little demand for money for
real estate speculation and as new
building operations have been almost
entirely curtailed, the demand for
mogtgage funds, ought TO be very light.
As a matter of fact, we have not had
a single case where an owner has come
to US in great need for funds and on
the other hand we have had several
cases, where investors have come TO US,
willing and anxious to invest large
sums in choice mortgages at current
rates. In times like this there are al
WAYS a large number of people who
would prefer to have their money IN
vested in choice real estate securities
rather than to have it unemployed III
the banks.
Lastly il is very pleasant to note
that there is great tendency on the
part of present owners OF mortgages TO
be lenient in the matter Of forcing pay
menfs. do not believe that many
owners will be forced to readjust their
mortgages in the present market, pro-
yided they show a disposition to meet
the holders Of the mortgages in the
right spirit. The lenders do not wish
20 take the property, or to force the
situation, and as long as they receive
their interest and are assured Of the
safety of their principal, they will not
press matters The real estate owners,
therefore, have every reason to look 10
the future with confidence and hopeful
moss