New-York tribune., 1919-03-10
Realty's Big Problem Is Finan.
cling; More Money Necessary
for City's Development
Amortization Will Bring Quick Relief; Would Re-
store Confidence of aptal and Make for
Revival in Building

mortgages being compelled to take
4 property, there would always be a
4 big sum of money flowing into their
1 hands, which could be placed on new
\ buildings, or expended in the con-
II struction of new provemcnts, so
that this system would stimulate ac-
4 tivlty in the erection of new build
4 ings and in real estate in general.
/ Some Would Object
can readily understand that this
Il plan may be opposed BY many of the
II attorneys for the mortgages, whose
H income would be reduced in this branch
Of their profession. BY having the
mortgages remain they lose their fees
IN replacing the amount of the mort
4 gage elsewhere, searching titles, etc
But they should stop to consider that
large sum Of money would come
l annually into tho hands Of their
clients from the amount Of the amorti-
zatlon. which money could be replaced
and IN addition thereto real estate in
vestors, knowing that they would not
/ be called upon 10 pay off the mortgage
with the exception of the usual 9 per
cent?, would be induced to bring large
sums OF money into the real estate
Held, thereby stimulating real estate
transactions and increasing the income
of the attorney.
Undoubtedly the question will be
asked: "How can the trustees and
other owners of small mortgages dis
pose of the annual payment which is
made on account of the principal if
! they loan their money on mortgage
having the amortization plan in it ?"
My answer IS, that there would be
two methods of reinvesting this money.
FIRST. Title companies to-day are
leaning out money and issuing certif-
Gates in which these small investors
could invest the amount of money
winch they receive annually on the
am mortization plan. 1t is true that these
certificates are not liquidable, but
should this amortization plan come
into effect the title companies would
undoubtedly arrange some method
whereby these certificates might be
come liquidable upon, say, sixty or
ninety days notice. 1t should be re-
membered that a large sum Of money
would always come from the annual
payments on the principal according
TO the amortlzation plan. which would
be more than sufficient to meet any de-
mands of those holders of certificates
VINO might desire to liquidate their
certificates
Second. Should this amortization
plan be generally accepted there
could be, and am certain there would
ganlzed for the special purpose of OBJ
tanning money from small investors
on the basis Of some plan suggested
for the title companies.
Big Annual Return
| wish to say that while it is prac-
tically impossible to amortize all
mortgages in the City of New York to-
day. however. this should not affect
the large majority of mortgages which
are held by the big financial institu-
tions, such as life insurance com
panies. trust companies, savings banks.
etc, of which there are a number in
the City of New York, and which have
many millions of dollars invested in
mortgages. These mortgages would
always receive enough during a short
period TO make another loan Hence
they would be enabled to loan at least
oO per cent more annually than thev
could do under the present conditions.
without impairing any interest thev
owe, and certainly without impairing
any interest of the owner of the
property. In this way new buildings
would be encouraged in neighborhoods
which are being entirely neglected to-
dsy on account Of the impossibility
OF obtaining loans. Therefore. al
though there may be a small number of
plan would not apply, nevertheless
this fact should not affect the accent
| ance Of the plan by the large mort
gagees.
also desire TO point out that under
the present practice Of demanding part
payment to be made upon the ma
turty of the mortgage, the owners
or the small mortgages and trustees
OF estates are IN no better way to-day,
q
celVe when the mortgage natures: TO
the contrary, their position is worse
1or they are not certain whether they
VIII receive tins payment and may be
compelled TO take in the property On
the other hand, should the amortjza-
ticn plan be adopted, even these small
mortgages, they could count on the
annual payments, and devise a plan
ioi e"elr investment year in advance
lnducement to Capital
reel IT my duty 20 emphasize the
1act that 1t took man with the far
Slghtedness and long vision like the
1 ,Ste " iiIiam H. Newman, of the New
YORK State Realty and Terminal Com
rany, to realize the importance of the
amortization Of mortgages. When
preached the subject to him it took
MN no time to see The great benefit
10 De derived from Amort:zing mot
cages. | feel justified in saying that
II was tins amortization of mortgages
which induced me. as Well as ot6er
owners who have invested their cani-
tai IN those magnificent apartment
houses on Park Avenue, thereby max
ing this beautiful boulevard the finest
fesidentlal section in the world.
1t also took the great knowledge
and broad mindedncss oe men IKE
Walter Stabler, controller Of the Met
fopolitan Life Insurance Company. 20
realize the plan Of arc crtization If
mortgages to adopt this plan, which
helped many owners cr apartment
houses and mercantile buildings %
retain their holdings and make their
investment in those lui,dings per
tectly safe.
In conclusion, would like TO say.
mat at this time more than ever be-
tore, the amortization Of mortgages is
or the utmost impor7 7ance, for the
simple reason, which is perfectly clear.
'nat all large moncy-lenders, life in
surance companies, trust companies.
savings banks and other large insti- |
tutons, are unable to lend any money
on real estate, for the reason that
'ncy are all loaded with Liberty bonds.
ana most likely Will ret be able to
Fr.