The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-12-19
USE REPAYMENT LOANS
IN BUILDING TERMINAL
N. J. Degnon Has Long Used
Proposed Mortgage Form
Would Have No Other.

Michael j DeGnon. we'll known a. a
subway builder, but better as the founder
| Of the great Dexron Terminal I'm Long
Island City. Is ono OF the strongest Id
vocates OF amortiaing mortgages.
Il would not accept n loan" Mr.,
Desnon said yesterday. that I could
not have the privilege Of paying or On
instruments during the life Of the mort
gage. According 10 the ideas expressed
recently regarding long term loans with
annual repayments on the principal. one
would think they were new In this
| locality. but the fact Is We have put UP
! all Of the great factory buildings on our
! property with the assistance OF just such
loans. Tho only difference is that we
have rome further than the advocates of
nnorttzing loans plan to 20.
A Of our loans are 10 be paid en-
. tirely during the life OF Tho mortgage,
| while those who favor the general adop-
| ton Of the repayment plan advocate re-
turns in fnstalments of only 1 per cent.
a year. One Of the largest commercial
operations ever xarried through In this
city is tho Looee-Wiles factory in u
| terminal property. which was financed
On q repayment basis by which the en-
tire amount Of the loan will have been
returned to the lender by the time tho
term OF the mortgage expires, In like
manner we have at our own request
! obligated ourselves In congestion with
the financing Of the Sudebalser Building,
the Brett Lithographing Conpany's
building and the new home of tho Rome
Metallic Red Company.
at Is NANTES. that sue p1Nctice
renders a real estate mortgage bond
practically as secure AZ any OF our
municipal or State bonds. n when this
fact become generally well knoNn
among investors there Will he many
millions o. private capital seeking the
security Of such real estate mortgage.
Mr.. Degnon said that 4. was Tystify-
ing to him why the present form or
mortgage had been permitted for so
many years, for no believes tt Required
only a temporary setback 10 ne real
estate market to demonstrate the weak
ness OF the foundations on which such a
form is built. .,
"rhe practice heretofore prevailing
he continued. has almost invariably
relied mon making the loan n rela-
lively small part OF the original IN
v.stneut, and relying solely upon TINS
disparity TO take care OF the reduction
IN value OF the improvements upon the
land due 10 deterioration. WITHIN the
last few wears. however. II ht' been
demonstrated beyond question Of doubt
trat sucl practice is not sat" or
rational. owing to the fact that a NUM-
Der ut serious losses have been suffered
by large lending companies by reason
Of the fact that the buildings which
wo.r the chief basis OF security have
hecon,s obsolete for present human
needs. and therefore have become WORTH
loss. leaving the land the sole security
for the original loan.
"iu MANY cases the increased value
of land has been sufficient to epa tho
original loan. but in many other cases
this has not been true and the lendei
, has suffered very considerable loss
owing to this fact the question OF estao-
fishing a sinking TuNd such as would
retire the original loan within the period
Of the mortgage has come tn public
notice and NO douht within the next Few
years will become the universe prac-
! tice with regard to long term mortgages.
81 recommend the proposed system" as
one ~ the most effective safeguards for
the conservation OF real estate Interests
that has been proposed during my many
years OF association VIII the u~pbuildinS
Of New York city"