San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1926-01-10
CHEAP MONEY
ENCOURAGES
. INVESTOR
Lowest Rates in History
Stimulate New
Construction.
BY ELMER A. DITTMAR
President, b. #. Dittmar Company

Oy 6hINA6N <As III 1 MAN
President, b. r. Dittmsr Company
There has been more money avail
able for investment in real estate loans
during the year 1925 than ever be-
fore in the history of San Antonio;
not only that, but interest rates were
cheaper than they ever have been be-
fore.
This large supply OF funds came
from three sources. Generally speak
ing, people had stored up a good deal
Of cash during the past periods Of
depression and poor business, and the
majority Of these had intended to use
this money in new business enterprises
during 1926, but when spring came
and there still was no rain,, and the
smaller business men began spreading
an atmosphere OF pessimism due to the
expected drouth, these individuals who
had stored up cash were afraid to en-
ter new enterprises and instead, in
vested their money in loans secured
by well located real estate.
LARGE SUMS RELEASED.
And in June, when the city pur-
chased the Water Works from the
San Antonio Water Supply Company.
an unusually large sum of money was
released locally. Practically all OF the
water eompany's stock was locally
owned and the holders of that stock
were paid between two and three mil
lion dollars in cash. The greater part
of this money was used to pay local
debts and TO purchase real estate
real estate mortgages and other local
investment securities. The release of
this large sum OF money had a mate
rial effect on the market and loans
in San Antonio. With so many people
wanting to invest their money. interest
rates naturally came down and by July
were very uneven, but the Water
company deal also affected business
very favorably for such sum could
scarcely be released in a city with
out II at once stimulating business
very perceptibly.
PLENTY MONEY.
The third source Of the great supply
of funds in San Antonio during 1926
was the insurance companies and 9th
cr financial institutions Of the North
and East. Due to general business
conditions money was unusually plen.
tiful in those sections and it became
difficult TO find satisfactory invest
ments at anything like a reasonable
return. So insurance and mortgage
companies, which had never done bust
ness here before, in San Antonio and
the surrounding territory, were in
search of safe loans. Being accustom-
ed to an average return Of g per cent,
these Institutions offer to make loans
on residences at 6 IL per cent and z
per cent With no other expense at
tached. Loans on select properties in
the central business district were OBJ
tainable at 3 IL per cent interest. This
is the first time that insurance COM
panies have ever loaned money on San |
Antonio residential property, and /
never before had the interest rate in
the central business district been as
low as SIP per cent. |
The already large supply OF avail |
able funds augmented by the Water |
Company deal and the influx OF north |
ern and eastern capital temporarily |
increased the demand for good loans
in San Antonio SO far above the sup
ply that the average interest rate was |
forced down from per cent to z per
cent and in some cases to as low as |
o IL per cent.
AIDS BUILDING.
Throughout the spring and early
summer the large supply of available
funds greatly stimulated building. A
large number of new business struc-
lures were erected and great many |
homes were built in the various addi-
tons In the city. For a while these
found purchasers as soon
as they were completed and new ones
were constructed as fast as the old
ones were sold. But September
brought to San Antonio the first eff
feet OF the dry season in the sur
rounding territory. The pessimism of
the farmers began to be reflected To-
cally and people began to hesitate in
their business transactions and de-
ferred building for while. THIS con-
dtion lasted through the first part
Of November, then came the rains dur
ing the early part Of November which
assured the surrounding country of
adequate feed crops and restored con-
fidence to the farmers and business
men in the small towns. That eondi-
ton was at once reflected locally.
began to speed up and loans
were and still are again in demand,
but the average interest rate was and
is from l TO IL per cen: lower on
first-class loans thnn it vas during
the first part Of 1925.
LOANS IN DEMAND
While it is an excellent thing for
this territory to have such n large
supply Of funds available at such low
rates, this condition has tended to in
crease tho demand for loans TO a
point where almost anything could
10 financed, and has thus caused Sc
we're competition among the various
mortgage companies aud other finau.
cid institutions. II