New-York tribune., 1921-06-03


per cent for the loan besides broker
age fee of $4,000, the witness said.
How do YOU expect to stimulate
building operations" asked Agr. Inter
asyer, when people have to do these
shings! People who want to borrow
money can't get it unless they buy
Suburban lots they don't want. unless
they buy run down tencmcnts. unless
they take Liberty bonds at par--which
sell in the market below par---unless
they pay huge discounts these
cxactions are made by persons with
respectable sounding names.'
Some OF these are respectable"
commented Lawrence.
81 said respectable sounding" re-
turned Untermyer
Lawrence then related how he ne
Eotiated second mortgage for the
White Operating Company of $4,000
Tor the property at the southeast cor
ner of Fifty-fourth Street and Madi-
son Avenue about three months ago.
He said he got the money from the
Columbia Discount Company, newly
formed organization to loan on mort
cages, He said he got 81 500 for nego-
tiating the loan for the borrower, that
the latter got $4,000 of the $4,000,
there being discount of $4,000. in
addition to the per cent interest.
AT the end of three years he had to
pay back the fun $4,000 besides the
discount of $4,000, and that makes the
interest about 20 per cent for that
loan. doesn't it?" asked untermyer.
Lawrence said that was correct.
Lawrence then told of loan by the
City Mortgage Company of 5000, on
% Washington Street for one year at
s per cent. In this case the borrower.
it was testified, paid 3 per cent fee
for the money, per cent to the broker
for commission and 6 per cent interest,
altogether 10 per cent.
Loan Cost $500
Lawrence said he arranged loan
by the Empire City Bank of $230000 to
the Harter Realty Company, at 2o1
West 11Tth Street, borrowing it at s
he testified, the Harter company had to
buy five vacant lots on Mathews Avenue
in the Bronx, paying $4,000 each for
them and $4,000 mortgage. In addi-
tion they paid the lenders lawyers fee
of $4,000 and brokerage fee of $2,100
and then the title company's fee.
I "Those Bronx lots were actually
worth about $4,000. weren't they?'
asked Mr. Untermyer.
\ 81 have not seen them," replied Law
renee.
/ 80 that your client paid about ss,s 300
for the privilege Of borrowing his
money!"
"Yes."
!; Sidney W Hughes, of Hughes &
s1,45o,oOo from the Mutual Life In
surance Company on the Seventh Ave-
nue. block between Thirtieth and
Thirty-first streets. To obtain the
loan, said Hughes, Levy had to take
twenty parcels of property, comprising
more than a hundred vacant lots scat
Levy, it was said, had to take the lots
at S65o,0O0 and pay 100000 in cash
out of the original loan for them.
Il 1t developed that the property upon
which Levy was asking a loan was
valued at S2,9oo,0o0 and that the loan
4 he was seeking was only about half of
this value. The loan was negotiated,
said Hughes, with President Shields Of
the Mutual Company and Mr.. Pea
not have got the loan If he did not take
the lots. He said he got a brokerage
Zee of $4,000, of which Levy had to
pay $4,000, for putting through the
transaction.
ii Hughes then related how ne got a
loan from the Manhattan Savings Bank
of S425,000 for the Melita Realty Cor
poration. the latter being required to
take the whole loan in government
bonds at par value of $100. These were
then selling around $95. He said that
was the only condition upon which the
Manhattan Bank would tender the loan.
ii In loan Of S145,o00 from the EN-
pire Savings Bank, he said, the bor-
rover, the Carson Realty Company, had
TO take vacant lots on what is known
as the Adee tract, near the White
Plains Road, somewhere along the
Westchester and Bronx line. 1t was q
g per cent loan, said Hughes.
81 "pidnt the bank refuse to give this
loan unless they could get rid of these
lots? - asked Mr.. Untermyer.
"Yes," replied Hughes; sin 1920 1t
was a rather usual thing for these
'conpanies to unload this sort Of ma
of money in New York City,"
"Was it common for the lender To
buy the vacant stuff and then land it
,on the borrower?'' asked Untermyer.
Hughes didn't know.
Hughes went ON TO tell of the al
legged exactions of the Prudential Life
Insurance Company, which insisted, he
Sdiu, tidC o. DoIIOWCI, tuS AVf VGS'
Fifty-fifth Street Company, take prop,
erty in Hoboken, at SO Hudson Street
facing the docks, for s128,000 as part
of loan of $550,000 at five per cent
The borrower in this case, said the
witness, paid $4,000 cash and took
mortgage of $4,000 on the property
He said the borrower also had to pa!
him two per cent fee of $1,000 ant
,salso title examination fee.
Il Another operation Of the Prudential
he said, involved the unloading of tn,
Takarassee Hotel, at Long Beach, on
borrower, the Jattison CONSTRUCTION
Company, as part of loan Of s650,000
ST The Tallahassee is said to be two
story frame structure, Mr.. Untermye
asking the witness if it twas fift,
years old" The hotel had to be takel
by the borrower for $115,000, of whicl
.he paid $4,000 in cash and the re
'snainder he had to take mortgage on
1t was said.
4. Unloaded on Borrowers
y The Brooklyn Savings Bank forced
concern to take property at $102.50
as part payment of a loan of $4,000
N 1918, at per cent, the witness said
1.-THE borrower here had to pay bac
$4,000 in cash and take first mort
rage for S92 500, according to testi