New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-04-29
Scarcity of Attractive Loan
Applications Due to
Less Building
Mortgas es Replaced
Views of Local Expert on the
Proposed Large Govern
ment Bond Issue
By EDWIN c. BENEDICT
OF Charles L. Moves Company

The present mortgage situation is
unusual All the regular mortgage
lenders, such as life insurance compa-
mics, savings banks. trust companies
and estates, have a supply Of money
usually available Tor general invest
ment. Yet, in spite of this. there is a
reluctance TO make investments or COM
mitments, as this country's entrance
into the war causes uncertainty as to
what the future demand may be.
There are two conditions, either one
of which is possible to result from our
entering the war. If the situation ne
cessitates important financing for the
purchase of munitions, supplies, etc,
it is inevitable that a great food OF
money will be released, a portion Of
which at least will reach the savings
banks, thereby largely increasing their
, deposits. This fact is clearly demon
strated by recent report OF the Rus
sian savings banks; during the period
from January to June, 1915, deposits
aggregated 96S, AGO. 900 rubles, and dur
ing the corresponding period in 1919.
10000 900 rubles. II Russia, notori-
oLsly undcrsupplied with money or It's
equivalent, can make such showing,
what can we reasonably expect of this
country. whose supply of money eX-
ceeds that of any other country on
earth at any time in all history
If. on the other hand, our entrance
into the war is to be of more or less
passive character, the present abund-
ant supply Of money will. in the natu-
raj order Of things. seek investment, as
there is nothing that distresses invest
ing institutions. particularly savings
banks. more than having an unusually
large amount of money on hand and on
6eposit in other banks at low rate OIL
interest, against which they are paying
higher rate of interest to their de-
positors.
There is scarcity OF attractive APP
rlications, due, principally. TO the lack
Of building during the recent past ne
high cost of material. coupled with the
difficulty of getting any nearby deliye,
ries. particularly of steel, prohibited
building on a large scale. Mortgages on
propertv already improved which had
10 be refinanced have generally been
taken care OF.
The fotation Of the large bond issue
contemplated may temporarily upset
the market. or at least cause an I'M
certainty. which amounts to the same
thing. il seems as if the government
might dispose of an issue of 80 per
cent bonds by making for them prac-
tically place as currency, sueh as
may at the present time be issued with
bonds as security.
If the bonds were legal to pass as
currency, say, between banks or III
large payments at their face value Plus
accrued interest. why should not ma
tional or state bank or trust company
or savings bank carry large supply IN
small denominations ana III ease v.
emergency pass them, or certificates
representing them, TO pa! uiHeIeHee''
or even depositors.
This rs n plan to which possibly many
affections might be made. Personally
I cannot see why ] would not rather
have a 800 government bond carrying
interest than a 800 Federal Reserve
Rank note carrying no interest. ms
matter might be arranged by expert
rnced financial intelligence so that II
would no. have the dreaded erect OF
unlimited greenback ISSUES.
The enormous sums passing between
clearing house banks could be settled
NTH government securities. Banks
could invest in the bonds portion or
tLeir usual cash reserve. for which they
now receive no interest, and could IN
emergencies. if necessary, pay their de-
positors in $40, $50 or 500 government
bonds. II It was made obligatory io'
banks and depositors to accept them, as
they have accepted Federal Reserve
Rank currency and notes, when GER
tainly are not based on any better Sc
curifv