The Washington times., 1925-07-04
IN
REAL ESTATE
EXPECTED
s. w. Straus Tells Realtors
About First Mortgages and
Their Usefulness

Real estate conditions in all
parts Of the United States have
entered an era Of unprecedented
activity with every assurance OF
prolonged prosperity. according to
statements made by s. w. Straus,
president OF 8. w. Straus and com.
pany, before the National Assoc
citation OF Real Estate Boards, in
session in Detroit during the week.
There will ~be ample capital
to finance these great activities,
Mr.. Stratus said. Developments
win continue in the suburban ais
tricts Of all of our great Amer.
lean cities. while the trend Of
residential construction viii be in
keeping with the growing demands
ana rights Of the people for. bet
ter standards Of living. Referring
directly to the valuable work &C.
coxnplished by the American real.
tor, tile speaker said:
You ara doing q service to the
Nation that IL beyond value be-
cause you are educating the pub
lie to become owners of American
homes and American land--and that
means that you are making them
stockholders IN the United States. !"
Referring to the financial aspects
of the real estate and building
situation, Mr.. Strauss said:
II have been asked to tell you
something about the first mort
gage real estate bond. why 1t was
called into being. what part it
plays Ia the development Of prop
erty and what its future useful
ness will be.
Throughout tho history of human
progress there ever has been the
need Of the financial element.
Columbus was a wandering dreamer
until his voyage Of discovery had
heen financed by the court q
steamboat for years, but not until
financial backing had been secured
did the Clermont sail the Hudson.
From the days Of the Babalonians,
1000 years ago, until the beginning
II the present century, funds for
the development Of building prOJectH
were obtained only by the placing
Of q mortgage on q property, tne
mortgages then being sold In their
entirety to individuals or corpora
tons.
until a few decades ago q largo
percentage Of the population OF our
country lived in small private homes
and all private business was trans.
acted in relatively small buildings
Consequently the mortgages of thoss
days were not large. But as the
standards Of living advanced, al
communities grew and cities became
more congested, there came the
need for improved types Of dwell.
ings. The modern skyscraper and
the apartment house were the re-
suits.
"The construction Of these larger
types necessitated much larger out.
lays OF capital. The task OF lending
money on improved real estate
security q generation ago wGs
mostly in the hands of the larger
institutions, such as the insurance
companies. The work OF upbuildiHE
the cities. therefore, could only ba
carried forward in keeping with the
growth of these lending institutions.
AS the natural results Of necessity
there then came into being the real
estate mortgage bond, which u
simply an ordinary mortgage divided
into small units, which gives ali
investors the opportunity to invest
in the same character of security
Let me say, however, that there is
still abundant place for the so-callcd
old fashioned mortgage as a finan.
cial instrument. In the financing OF
modest properties where 1t would
not be feasible to divide the mort.
gage into a bond issue.
Naturally the success Of the
first mortgage real estate bond has
called into being practices here
and there that have been unfor-
tunate. Imitation has ever been
one Of the penalties OF success.
Imitation Of the genuine by the