The Holbrook news., 1914-12-19
REAL ESTATE AND
 FARM MORTGAGES
A Much Better Commodity Under Present Conditions than
 Stocks and Bonds.

large financial house caught our attention. This concern deals largely in mortgage real estate loans. Its ad beglns with ''In- vestors in farm mortgages not worried now." There is a basic fact at this point. We are in the midst of a time of financial stress. It is not entirely of our own making. While general con- ditions have been rather unfavor- able for some time and money scarce, due to a shortened agri- cultural production of the past few years, and in some measure to a lot of unstable financing, the present unusually stringent con- dition is due in large measure to the war in Europe, limiting our field of business operation, and severely curtailIng our natural markets for surplus production both in agricultural and manu- featuring lines. Stock exchanges are closed, and there is scarcely any investment market at all. Those largely interested in stock and bonds are naturally not sleep ing very sound. as it is very nat ural to suppose that in a great measure their income will be cut in two and in many cases stopped altogether until business af- fairs adjust themselves and the wheels of commerce again spin smoothly. This is true of almost all character of stocks. Railroads and industries are all laboring under a reduced business, and will doubtless for some little time yet. Their securities have de- preclated in value along with their earnings, which is the na- tural consequence. This condI- tion does not in any such mea- sure effect the we'll secured real estate mortgage, either on land or city property. Of course there are watered stocks. A builder who pays $2500 for a lot, erects building costing a $15, 900 first mortgage on the property is not handling stable piece of paper. The purchaser of this mortgage has no more security than the holder of stock in a corporation which issues stock in advance of it's actual worth. There are many of these inflated mortgages out on the market. Scores of them are sold to solid good people. They may be on attractive. we'll appearing properties where the rental is rather substantial, and which in financial statement on paper shows good, yet back of it is not the adequate security. There is nothing ideal about busi- ness. It is very real proposi- tion, hard, cold leveling process and when conditions get tight 1t squeezes these water-logged real estate mortgages just the same as it punctures the hot air stock or bond. Therefore, though at it's base the real estate mortgage is naturally about the soundest possible investment, having as it's fundamental a commodity of known merit. and one which is of all worldly things the most stable, vet it requires care in it's making, and a conservativeness at all times in keeping it within the limit of value. Placed at 40 to 75 per cent of the value of the property on which it is a lien, there IS positively no safer form of investment, and no matter how stringent conditions may become the investor comes out a winner when good times again come around. There is not the propor- tion of inflated mortgages as there will be found stock issues simply on account of it being difficult to handle them. A piece