Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-23
REALTY FINANCING
CHANGE IS SEEN
Banker Says Investors Now
Asking Participation
in Profits.

The American public today is inter.
ested primarily in capital appreciation
rather than a return on capital invest.
ment, and industry is raising its money
not by the issuance of bonds, bu
through Junior securities in the form Of
common stocks, Philip w. Kniskern
vice president of the Continental Mort
gage Guarantee Co., New York City
told the Mortgage Bankers Association
Of America at its recent convention.
Public Buying Stocks.
Great corporations are taking advan.
tage of the popularity which equity
participationS enjoy in the public mino
and are getting their financing in very
liberal amounts without the assumption
of any fixed or recurring capital charges
and without any obligation of repay
ment, said the speaker, because such
common stock as if being issued for
such financing has no par value in the
sense that par value is used with refer
ence to bonds, although they do. OF
course, have a stated par value, which
is technical and for all practical pur-
poses is meaningless. They do not carry
any fixed interest rate, nor do unpaid
dividends accumulate, yet the public is
buying this stock in enormous quanti-
ties at its present extremely low yield,
he said.
Advice to Realtors.
Dealers in real estate and real estate
securities should take advantage of this
desire of the public for equity particle
pations, said Mr.. Kniskern, pointing out
that real estate finance today is in abb
solute direct competition with all other
forms of investment.
In years past the relationship of the
mortgage money market to the general
INIT
real estate is to get its portion of the
capital and credit available it must COM
pete successfully with all other forms of
securities, said Mr.. KniSkern.
Public FOrgets Losses.
Profits in stock market operations
have been more spectacular and have
been called more directly to the public
mind than profits in real estate, though
the land has yielded great profits in
short spaces of time, said the speaker.
He said:
In all the great forward march of
the price of stocks the public has for
gotten and lost sight of the immense
losses which can occur in the recession
in market prices which come with
marked regularity upon the Stock Ex-
change. They hear of a friend who has
made several thousand dollars in a quick
turnover, and are blinded by the glamour
of quick profits to the fact that the ma
jority of great estates of this country
have been built up by the appreciation
of land values.
Speculation Ends.
''There are many who believe the pres
ent period of speculation is reaching it's
end and that the lure of quick profits
is being destroyed by the actuality of
substantial shrinkages. Each period of
depression like that of last week elimi-
mates many from further market opera
ton and inspires restraint and caution
in many others.
I'VE now see reports of suicide from
market losses; reports of accounts of
six figures and more being sold out and
extinguished; records of day after day
when the new lows outnumber the new
highs four ind five fold, and reports
that out Of some 600 stocks traded in
there are only a handful now selling
above their price on January /.
These are the signs that usually
indicate the beginning of the end of a
speculative period-and they are the
hopeful signs to those who wish to see
more equitable distribution of the
wealth and credit of the country among
Its various industries"