New-York tribune., 1919-03-10
By Harry Eischel

Dy L 1dIl / lSGlCl
II IS we'll known fact that real
estate in the city of New York has
suffered more than any other business
or investment The New York real
estate market passed through several
dangerous periods in the last few
decades. namely, in 1878. 1893 and
1901: hut at no time were the con
ditions az critical as they are o-day.
The panic OF 1898 was not limited to
real estate alone. Naturally, real es-
tate suffered in common with all other
business. But the panic lasted only
one year. Confidence was soon re
stored Activity in the real estate
iield increased and investments were
made more freely than before The
panic proved to be merely an acute
sickness and the man of finance ad-
1ninisterod the cure rapidly and efec-
lively by placing plenty Of money in
the market on liberal terms. The best
proof OF recovery was that there were
abundant purchasers for real estate
both at public auction and private
sales. whore property could be bought
at reasonable prices.
1t Is quite remarkable how differ
ont was the panic of 1907. which still
continues its depressing influence
Almost eleven years have elapsed and
not only Is no sig gn of relief in sight
but conditions are getting worse each
year.
The sickness has become chronic.
Men with money will invest in specu-
jativo transactions, even at low rates
o. interest, but refrain from invest
ing IN real estate, which would yield
good income and be a much safer
Investment.
Realty Income Good
here are two questions which arise
from this state OF facts.
T. Why do such conditions exist?
What is to be done to remedy this
evil?
While realty owners are suffering
considerably from the many persecu-
tons of the various city and state
departments, which compel them to
I'm a ke considerable expenditures,
nevertheless this would not have de-
TERED real estate investors, because
the income from real estate is too
tempting.
There must be some other reason
why hundreds of millions of dollars
are lying idle in vaults, or at very
low rates of interests in trust com
pauies. The owners of this money
would gladly invest it in real estate.
but they are afraid to do so. The
reason IS that they are never safe
With their investment on account of
the mortgages, who have made it a
practice to demand part of the money
as soon as the mortgage is mature, no
matter If the mortgage debts amount
10 a very small percentage of the
value OF the property.
There was & time when investors
were safe in buying property by in
Nesting from 25 to 40 per cent of the
value Of the purchase, but to- day
conditions are such that even so or
so per cent of the value is not safe
because you do not know how soon
the mortgagee VIII demand part pay
lnent. II the real estate owner has
not the ready cash to meet this de
mand, and as there are no ready pur-
chasers to buy the property at any
price. the natural result is that his
entire investment is lost, and the prop
erty goes TO the mortgages There
Is no doubt that the mortgagee, as
"a rule, does not want the property
but is compelled 10 take it against
his own wishes. II is the old story
of the dog in the mangcr. Such is
the state Of affairs existing to- day.
No Reason Apparent
7 have spoken to many Of the largest
money lenders in the city of New
} ork and not single one could give
any reason for demanding the mort
cages 20 be reduced. II is simply a
case of doing what the other fellow
does. 1t can readily be understood
that this TACT not alone has withheld
hundreds OF millions Of dollars from
being Invested in real estated. but il
a. brought matters TO such pass
tnat all financial institutions are
stacked up with lot of real estate
MnlcH is frequently managed by in
competent men. Whereas, had the
owner OF the property been let alone
ne could have managed it in a much
better way, TO the advantage of all
concerned. This cannot be denied by
any one who Is at all cognizant with
the real estate situation.
Now, as to the cure, there is only
one way 10 remedy this existing evil
and that IS by a united effort Of all
me largest money lenders in New
orr to have their mortgages amor
t.1ed. 10 explain, every mortgage
snoAld demand regularly the payment
oi per cent OF the amount of the
mortgage each year so that the real
"state owner should be compelled (and
would gladly do so) to add the amount
ot the amortization to the annual
running expenses OF the property. In
'ais way he would be prepared TO meet
the demands OF the mortgages with
oas ..,...,'.', },ee,,.ns any hardship: BY paying
regularly The amount Of per cent
eacn year the owner would have
'eAs interest 70 pay each year
and the mortgage would be grad
naily reduced. In time the entire
moregagc would be paid of without
Wy d'Hlcuity on the part OF -he own
e. IN addition thereto. instead Of the
REAL ESTATE