The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1926-02-16
LATEST NEWS AND QUOTATIONS OF TIE FTNA
ASSURED BONDS
IND FAVOR
BY RICHARD HATTON


The subject of real estate bonds
) guaranteed by a surety company IS
one which is at present attracting
the attention of the investing pub
lie according to Bertram Chester
man, executive vice president OF the
Morris Plan Bank, who, in dis.
cussing this form Of investment to-
day, said:
saThis form of bond in which
either the bond itself is guaranteed
By. one OF the outstanding surety
companies in America, or IN other
cases in which the first mortgages
underlying the bonds are guardI-
teed, originated in New York and,
apparently, has not been very well
known Inc washington heretofore,
or, for that matter, in other parts
Of the country.
The New York mortgage COM
panies have for many years past,
ne stated, ssbeen issuing these,
guaranteed bonds with great Sfc-
cess, and they also have attained
q reputation for safety, which they
deserve. in the New England
States
Mr.. Chesterman stated that the
investor who desires absolute
safety for his funds heretofore was
sometimes uncertain as to the
safety OF a. bond or q first trust
note which was offered him. In
latter years, however, the mortgage
companies in New York and some
other cities. seeing the difficulty
which faced investors in this d.
rection, FASTENED to give the i'm
weston just what he wanted in this
direction in the way OF an added
safeguard, namely, the unconditional
guarantee OF the principal and in
zerest OF either the mortgage bonds
or the mortgages themselves by
some outstanding surety company.
When the National Surety Com
pany Of New York. which was the
first Of these surety companies to
issue such q guarantee decided
upon such & policy about two years
ago" said Mr.. Chesterman, they
sltered the whole situation as to
real estate mortgage bonds. When
these surety companies, with re-
sources of many millions Of dollars
put their absolute guarantee on the
MORTGAGES or on the real estate
bonds, it provided & field OF in
vesfment for not only the inves-
tor, who was not equipped himself
to make an independent investiga
ton Of the bonds, but It also gave
q field for investment to those who
were more experienced, for such a
guarantee, OF course, carried with
It tremendous weight The National
Surety Company and the other
surety companies, issuing such q
guarantee, Of course. realized they
were assuming q real responsible
fly. but these companies have taken
the utmost precaution to make
such an investigation Of the under
lying securities as to make the pos
aibility of their company sustaining
a loss the remotest.
This business. it seems to us, is
4 logical business for the surety
companies to enter into and one
may assured that It is, when com
panies Of such high standing as the
National Surety Company, the
United States Fidelity and Guar
anty Company and the MARYLAND
Casualty Company have decided
unop a policy to guarantees these
bonds
.sThe small investor. or for that
matter. the larger investor In this
country, for years has relied en-
tireiy too much upon the high
pressure method Of glib stock sales
men and bond statesmen, and has re-
lied teo little upon their own inde-
pendent investigation of the Sc
curities offered TO them before pur-
chasing.
I'VE think that the policy Of the
National Surety Companies in put
ting unconditional guarantee upon
such real estate bonds as have pass
ed the acid test of their investi-
CATION develops an entirely new
field for the cautious and intelli-