New-York tribune., 1919-05-29

100000.
Senator Kaplan asked if Mr.. Kelsey's
company invested in other kinds of Sc
curities during 1918. He was told that
1T kept its capital employed at all
times, chiefly in railroad and govern
ment bonds. Some of the railroad bonds
were bought at below par, Mr.. Kelsey
said.
Income Would Be Greater
Would the income from those bonds
normally. taking into consideration the
cost OF the bonds to your company, be
greater than the income Of your COM
pany on a building loan of similar
amount" Senator Kaplan asked
Yes Mr.. Kelsey replied, you
could get railroad bonds that were pay
ing 612 per cent and per cent aid
railroad notes that were paying ~
per cent"
$50 that it became improbable dur
ing 1913 for the Title Guarantee and
Trust Company to invest in building
loans 2"
"We were merchants without stock
of goods as mortgages. We can only
carry so much stock. Nineteen million
dollars is more than our whole worth
and we were carrying it as far as we
could. We would have sold 5000 900
/ if We could. We are dependent on the
/ public. What we wanted to do was
not so much to help ourselves as TO
nelp the building situation-to get the
money to take up these mortgages.
Then we could sell thirty-eight to sew
enty-fve millions"
Fewer Applications Recently
Mr. Kelsey added that there were
few applications for building loans and
mortgages in the fast few years. The
title Guarantee ana Trust Company s
assets varied from 545,000,000 to S53,-
100000 in the last five years and it has
carried between $4,000, 600 and $11 ,OOO,-
900 invested in mortgages, Mr.. Kelsey
said
Senator Kaplan sought to ascertain
if Mr.. kelsey's company is ready to
make building loans on the same per
centage as in 1916. The witness re-
piled that money is being lent on the
same percentage by our estimate of
the value" In fixing this value, he
said, the present cost of labor and
materials is not entirely taken into
consideration he rent that a man
viii receive from the property is also
taken into consideration, he declared
Senator Kaplan questioned the wit
ness on the fees charged by the title
companies in making loans. Mr.. Kel-
sey. said that on a 100000 building loan
his company's charges would be 212
per cent. or $500 Out of this, he
said, S495 pays for searching the title
and issuing a policy. The remainder,
he testified, is for lending the money
and paying it out in instalments" :"
These fees are in addition to the in
terest charges, it was shown
Mr.. Kelsey declared that under pres
ent conditions private capital is not
willing to invest in mortgages, chiefly
BECAUSE of the heavy income and sur
tax revenues.
"What we are trying to do Mr.
Kelsey said, 'is to get you and Con-
gress to make it worth while for pri-
vate capital to finance building opera
tions. Unless you make it worth
while, capital won't do it. What you
are trying to do is to get private capi-
tai TO lend at or y per cent now
which is much below the market, be-
cause one can get 6, 612, 7 and 712
per cent on good threc-year railroad
notes, and on top of that you say, You
shall have only 3 and 312 per cent
after You pay the expenses out of it. ."
Investors are running away from
mortgages and viii continue to do So"
Mr.. Kelsey said. Government bonds
just issued, paying 4a4 per cent and
exempt, yield a larger return than a
) and 512 per cent mortgage, he de-
claiod. Tie was one Of the first wit
nesses before the committee to fail to
cspouse Federal Home Loan system
The machinery would probably be too
clumsy, he said
Would Exempt Small Mortgages
Abram l. Elkus, chairman of the
State Reconstruction Commission,
who also testified yesterday. agreed
with Mr.. Kelsey in the belief that
cXempting mortgages of $4,000 and
under from state, federal and muni-
cipal levies would stimulate building.
Nh. Elkus gave a comprehensive sum
mary of the work and observations of
his committee. Thirty-seven blocks
were surveyed by 500 workers and
data was obtained on between 175,0O0
and 100000 residents of LOO houses
Rents had been raised from 80 cents
to So on cheap apartments, he said.
He produced figures showing that
the cost Of building has climbed 81 per
cent. but other commodities have as
cended 1l3 per cent.
Ike attributed present conditions in
me Bronx to the overbuilding there
several years ago The East Side popu-
lauon at that time. he said, moved up
town because rents were little, if aa,
higher than those of their i'll ~sxti-
lated, old fashioned flats.
Labor and present prices Will STAY
high for from three to five wears at
least, he said. The building operations
to be stimulated by the lending cor
porations organized through the efforts
OF the state Reconstruction Commits