The Yale expositor., 1918-02-07
The Rebuilding Of
American Cities
How They Have Been Almost
Entirely Rebuilt in Two De-
cades. Financing tae First
Sl<yscrRpcr
By S. W. STRAUS
PrOminentN New York and Chicago Banks)

wish TO bother with the food problem
we have an excellent cafe in the build
ing"
The speaker was the manager of a
large apartment hotel in Chicago. He
was demonstrating the conveniences
Of his building to some prospective
tenants.
I'm this two-roOm suite four people
can be accommodated" he continued.
1.-THE beds fold up and disappear in
the wall the library table can be
quickly converted into dining table
the kitchenette is revealed by throw
ing back the doors. Everything is sim
pie, complete yet compact. We fur
nish your dishes, table linens, gas, ice
even the writing materials in that
desk. You are freed from absolutely
every bother, and have home COM
bining the social attractions of hotel
and the privacy of an apartment"
Thus he summed up in few words
the features of type of building that
! is revOlutioniZing American cities.
From the ample residence of twenty
year ago to this amazing specimen of
our tendency to eliminate household
duties and make one room do where
! five existed before is a change that
has just about reversed the average
Americans habits.
And the change has not been con-
fined to dwellings, either. A walk
down the prominent street of any large
American city today cannot help but
impress one. Where once there exist
ed structures of one, two and three
stories for the most part, we now find
skyscrapers towering eighteen, twenty
five and forty stories into the sky. So
completely has the skyscraper sup
planted the old-style building that
! business centers of American cities
have been practically rebuilt during
the course of only two decades. In
no other country has such revolution
occurred. The story of how it came
about is interesting.
| 1t was, OF course, inevitable that a
need should be felt for higher build
ings. AS cities grew larger and land
values scarce, owners of buildings
found that their properties were not
returning a sufficient income on the
investment. 1t was felt that a parcel
/ of land should be utilized to greater
extent than by erecting a three or
four-story building on it. But there
were practical difficulties in the way.
A building under the old plan of
construction could not be much in
! creased in height. The necessity Of
having enormously thick walls, if
height was to be obtained, resulted in
loss of light and space, especially on
the lower floors, where room was at
a premium. Until the advent of the
steel skeleton type of construction,
therefore. little progress was made in
attempting larger buildings. The new
idea swept aside at once the construc-
ton difficulties.
Then there was another problem to
be solved. How were the larger build
| ings to be financed?
At that time the first mortgage bond
issue was practically unknown in
America. If builder desired to Sc
cure financial cooperation in erecting
| building, it was necessary to enlist
the aid of a bank, insurance company
| or private capitalist, and secure a
! straight mortgage. But there were
limits to the size of loans to be obtain
ed in this manner. Institutions and in
dlviduals, even though they were able
to invest the money. hardly desired to
| tie up large sums in one project. A
mortgage of $4,000 was difficult TO
secure. When one considers what a
drop in the bucket $4,000 is in flnan-
cling a skyscraper, some idea of the
financial problem confronting builders
of that time is gained.
Often times when money was tight
or financial institutions had loaned out
their limited allotment of capital for
the year a builder was actually unable
to secure financial cooperation TO any
extent
AS result of this condition worthy
building operations were frequently re-
stricted or abandoned and the develop
ment of American cities suffered.
But, almost simultaneous with the
! introduction Of the skyscraper in Chi
cagO, an adequate method of financing
was also brought to the attention Of
! the public. The idea was not new,
having been borrowed from Europe.
| The principle was TO place a straight
mortgage on the property. This mort
gage was then to be divided into frac-
| tional parts and offered to the public
! In bonds of convenient denominations.
! fhuS. not one. but many, investors
might share in financing a project and
loans of almost unlimited size could
be secured. The plan was tried out on
one of the pioneer skyscrapers in Chi
cago. The opportunity TO share along
with the large capitalist In mortgage
on the highest grade property appealed
! to investors and the bonds were read
lily sold.
The success of the experiment soon
led to the use Of first mortgage bond
issues IN other projects and today 1t