The Birmingham age-herald., 1914-10-21
OPTIMISM KEYNOTE OF MEETING OF THE
 REAL ESTATE AGENTS
esesssssseess..s.sssesse

ment, with funds obtained from thi | source, which they secured from thu
 banks located in eastern reserve cities. T am informed that the federal reservl
 bank of Atlanta will complete it's or
 ganization in a few weeks and will b
 In active operation by December l. Tn
 facilities offered by the new system vii
 enable banks to take care of Legitimate
 business of every character.
 Marx on Loan Market
 | Otto Marx the banker, spoke on tn, present condition of the loan market ans it's relation to the real estate business His address was received with great in.
 terest and he received hearty applaus, | at it's close. MT. Marx said:
 l "In order to discuss this briefly. I vii divide the subject into two parts; first | The Present Condition of the Loar
 Market;' and, second, The Relation oi | the Real Estate Loan Market to the | Real Estate Businesst
 "For the 12 months prior to the war l the rate on real estate loans In Birhing- | ham had been higher than in the preced- | ing five years. The only reason we could assign for the high rate was the in- I creased demand all over the country for
 loans on real estate. reflecting a general l expansion in building operations.
 | Tn order to arrive at the fundamental l basis of the real estate loan business in | the United States, we must begin at the 1 source, that is to say where the money comes from that Is so invested The great percentage of funds invested in this manner in the cities of the United States has it's source at the big insur- ance companies trust compa nies savings , hanks and trust estates The life in- I surance companies are the greatest in- vestors in real estate mortgages since the adverse legislation by the government against the railroads; they now are giv- ing real estate loans the preference over railroad bonds and have largely in creased their holdings of real estate mortgages throughout the entire country. The rate in Birmingham, during normal times, on central business prop erty is per cent, outlying business prop erty 5h. and residence property 551. This rate has gradually climbed up to an average of per cent covering the whole territory. When war was declared, every company loaning in Birmingham and every individual who had been loan ing here immediately ceased operations and since that time there have been no loans made in this district with the ex- ception of a few made with local capital at high rates. The reason the life insur- ance companies stopped was on account of the enormous demand for policy loans; one company, the Penn Mutual Life h. surance company, having made loans on its policies at the rate of $1,000,oO a month since the war began
 notwithstanding, however this stren- uous demand, all the big companies have ected in very liberal manner, renewing all maturing loans at the old rate and not Insisting upon the payment of Diatured annual principal installments. hut have firmly been insisting upon pay ment of all interest due. This policy has
 been of material assistance to the com rnunity.
 Summarizing the present condition of the loan market, l, therefore, would say
 there are no loans being made in Bir-
 ningham at present, except a few small loans with local capital at high rates. am of the opinion that the larger | companies will resume when normal fi- Iancial conditions exist These condi. tions cannot exist until, first, the foreign | exchange situation in the country is
 strengthened out, which is rapidly being | arranged by the $100,0OOOOO gold poo
 which was organized by the large banks
 In the east and west; and second until
 the cotton situation is relieved.
 Relieving Cotton Situation
 There is only one way, in my opie
 ion, that this situation can be relieved
 on a sound, economic basis, and that | Is by the formation of bankers pool
 wioh was suggested by MT Festus j. Wade of St. Louis, his plan being that
 the banks throughout the country put up S160,000,000 to be loaned on cotton warehouse receipts for one year at
 per cent, thereby taking a large amount
 of cotton off the market, relieving the present pressure to sell. I am firmly
 of the belief that the cotton situation | has been very much exaggerated by the politicians There has been an erron- eous Impression created in the east ana
 north, this impression being that tht south Is bankrupt on account of tht low price of cotton. This Is not true Ii the south realized from 65 to 71z cents for its cotton 1t would be a tremendous loss. but we would not be bankrupt We would be able to pay our debts
 and look forward to next year for bet. ter luck and better prices.
 | When these two conditions nav. been adjusted money will again flow into Birmingham as 1t formerly did but we will never have great genera prosperity again throughout the whoi; country until the railroads are per mitted to raise their rates in conform
 ance with their enormous increased
 operating costs which have been pilint up on them for some years.
 "The second part of my subject-th, relation of the loan market to the req estate business-it is very patent [, everyone that there can be no activ' real estate market unless there Is al active loan market for the reason tha
 If we do not get foreign money t, carry loans on real estate. our loca lcapital would soon be absorbed ant
 we would be sewed up in bag.
 "In conclusion I desire to state-ant IT would like to impress upon you al l-that one way to est blish splendit
 credit for real estate loans and all in vestr1ents in this city and state is tha
 we maintain law and order. drive tn, pistol toters from the city and sum
 marily punish all lawbreakers. If ou
 crinina1 court procedure is not th' right one-and of this I am not com potent to judge-then let us get tn
 gether and get the right one, so tha i've can establish reputation of 5eint more lawabiding, which is contrary tt Jour present status"
 Fill Ferguson presided over thu meeting and called upon James B } Drake to state the progress made II the organization of the exchange. Mir Drake stated the exchange had beel : Incorporated with Al members and In cluded all the old firms of the city ex 2 cept three and eight or ten of tn younger firms He stated the mem . bership was limited to 50 members an that headquarters had been opened il ]. the Chamber of Commerce building
 Mir Ferguson read the constitution and bylaws of the association, whicl were discussed by the members. H } stated the purpose of the association , was to advance the interests of Bir rningham and it's citizens by fosterin! , public Improvements, an equitable syc tenn of taxation and the enforcement Q "Iz-- -vnt