Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: v. 18, no. 457: December 16, 1876

Text version:

AMS lUaglM^ mi: f 8}.: mm-. SEW ¥8Sg', §A¥yiiDA¥5 DE8BMBEfi !§> l^?g-. M iB? 'i'liiBfe OSri lEAil; 111 adUliye , il8:Bli; ^ fc; iv: '^Wiiiki'; N'bs 'iii AljS ilt iskbinWlV. ttlE f tikbRY Dl^ LANt> SI^CULaTION. Aftel- the fclbse of a bailie il bbcolnea Ule diily of tiie Gbiieral-iu-Ciiret to slil-vey the field of ac¬ tion, to bm-y tiie dead, to provide for tlie Avouud- ed, to study tiie causes of disaster and to carefully Uote the elements of successful reslstauco. \Ye are disposed to regard tlie era of laud bpeculatiou Avhich 1ms recently culminated aud closed, in tiio Ught of a great contest; und ourtioive'S as studioua spectators contemplating the grand affi-ay. In the earlier stages of the campaign, tho hoafc of speculators an they saUied forth and struggled for tho vantage grounds of speculation nuiy be fitly said to have rosomblod a victorious invading army capturing pohit after point of the enemies country, until at last they found thonmolvos in undisputed possession of tho entire territory. In the sheer absence ot other Avorkls to conquer, tho battle then lulled and the victors gorged Avlfcli BUCC088 became reckless and unelrouui8poet=" mox'O engaged in appropriaMng and devouring tho spoils, than in safely garnering antl protoofc- lag their uequlsitlouB. Buddonly tlio note of alarm is sounded in tho eamp="a mutiny is abroad, tho mortgagees, horotoforo truHty ana oomplaeont oilies, are all at onoo aroused and deeply concerned for an equal distribution, the payment of their tolls, imposts and bounties, and in default of compliance AvitU their demaudfi, threaten the assertion of liheir reserved rightfi, Avhlch means conflsoatlon of the seourities pledged for their protection, These mortgagees maybe regarded as flnanoinl, more properly than physi¬ cal allies, holding immense rannomaliypotheoated to procure the sinews of Avar, At all events, from friendly alUes fondly relied upon for suecor and support, these mortgagees are suddenly trans¬ formed into marked antagonists, prepared to en¬ force their rights to the extent of tbe reversal of the former victories and the obliteration of their fruits. This the real battle, or hand to hand con-' test rather, no longer a mere metaphorical oue, is now raging between speculators and mortgagees. It marks the sharp outlines of a portentous revul¬ sion, and is found to be an entu-ely unequal strag¬ gle, the mortgagees having the Law on their side, and being equipped and armed with thepoAverful weapons, which that dread commissary supplies. These contests are daUy being reenacted and re¬ newed in the arena of the several courts; the re¬ sults of the different issues being set forth before the geiieral pubUc in tlie unceasing stream of foreclosure proceedings and the daUy recurring reports of auction sales. Dropping the language of metaphor and ad¬ dressing ourselves to the consideration of our present theme, we are puzzled beyond measure at the outset to discover what charm inheres in this matter of speculation in bare, vacant dead lots; -yrhat fasciimtiou holds the enraptured mind oi [m\ %\\ iii fli§ ii'eit'.ll8iig M i'ebicife^l eill-Hgl- iV fcBlil^ss BUl-sglVeUlbi i'.]s^ IB '(iSiiiig iiiiiiEi- '^Ul liiagib sikil iii'e ^M', lidid, i-^ilil^iVfe ^elll-ll\ 'cilli \%- 'c'aiiib bialli'e'ci iVitli siibli ii-i-b;i^tii4 dlti-^AbUyiis; giVo billlilBsBiildlly iii-igiil lli-ecillls8t lilBslibbllAe AvfedlUl tUicl ilivesl iLeif willi silcli siiecidils lii-oiii- isfe^ ot UilWiti iil-biil. Ve call i-eddlly hlidei slaild tile cUse oi tlie entei iu-lsiilg lUlcl vehtUlesonic piolleer Avllo eiulgl-alesi to i-cuiotc aUri Udclvilij'cd regioiW, A\ liere by diilt of liisi palienl iudllstfy ulld self-doiiyiug toil ho roclaiiiis wtislo add barrel! land; by folUngii-oes, uprooting sluiuii'^ aud as- &i(Uious cultlvjilion of the Koii, ho renders that AAhloh Avu'! vahiolcss and unproductive a source of incouio und support lo hiy iandly. Wa can fur¬ ther undorstand, that as time rolls on and the surrounding neighborhood bocoines developed and settled, that a natural appeclatjiou would lake place in tho value of tho laud, from wliich there Avould bo Hkely to result a proilti of soA^erul liun- dredper cenfc. upon the original hivesfemeut. Wo can Imagine another epoch in the history of «uoh farming land, if it happens to bo loeatod in Iho environs of a growing aud populeuH town or cifcy and ultiinafcely einbraeed AvKihln Its boundaries, when tho oneo broad acres ol! Iho farmer nilghb b© required for buildiug sllefl an town or city lels; in that case, aflor each aero has beeu Biibdivlded Into its oemplomeut of twelve full oily lotp, we eonooive tbat another signal eiilmneement ©r op= preolatiou In the vakiG of thlfi land might oceui', it is ,i\i8t at this point in the hifitory of land enter= prig© that thespeoiilfttor in prnprhiprn'mw appears upon the stage and plies hlfi peeuliar vooatJen, after the man Qi toll has bestowed his capital and labor upon tho land and has rendered it Busoepti- ble of the speculator's manipulations, During the interval Avhloh elapses between the sub= division of farm lands Into city lots and the point of time when sn eh lots are absolutely needed for buUdlng improvements there is an area, and tho only one so far as we can disoeTO, Avhen specu¬ lation assumes the oharaotes of legitimate bnsi^ ness, The carrying of vacant lots durhig this period, the bridging over of this inteiwai, may be justly expected to result in a projBt---the propor¬ tions of whicli should be strictly guaged by the amomit of capital invested and the degree of risk incurred. But after lots have been prepared for market, have received aU the advantages of street improvements, along with water, gas and sewer service, tlie question of values must then cease to be speculative and be governed entirely by existing demand, and the abUity of builders to produce buUdings upon them at a profit. When that stage of development has been reached each lot may be said tb have attained its maximum value. Any addition attempted to be made to such value by the artifices and devices of the speculator may be considered purely ficti¬ tious representing only the daring and courage of the individual operator. Speculation in land then becomes a forcible effort on the part of the speculator to leAiry a toU or bonus upon the builder of a sum just so much larger than he is legitimately able to pay as is the excess of value demanded. While builders cwbe fouud who ^e willing to nuiid Lusnus-i iolliid pdsincss le ilie 1 isle, lo pay inore for llieir laud Ihaii udgmenl AAanaups, the game of surcessfiil. liut us lUero 1-) iS a natural aversion to los«!, and an mdisposition .)ii Ult put i>i, ul uil iiKl ,(i t tub til in ui.ii n; oiii thepait of mankmd lo ombarJi: ih unpronl- hljie sclieliibs', llils ei-ialic deiliaiicl loi- iots is illiiil- ed, bbbii uisaiipeals butircly, aiid tlie spCciiialoi- is iolcoci Id iliid diiolher Jtuii ivol. lieiicc, ni Iscs Iho 1^1 cat gahie ot sliccdlaliou. Tile Avild vagaries aliu hel-oic iuUcies ol' llio olwl'dtor liicli coino iU as iinljorlaiit faclols Avhclowitli the gdhio Im play¬ ed in despair of llndlug a Icgitiliuito dcUlulld fi-oui builders at forced ahd uiuialurnl prices tlio speculator sucks frcsli vloliiU'^ among llio HiiiH)lo mludcd ulld ciodulous i)Ubllc. Uy cxaggeiallltg tho inoritM aud crying up tlio special oxt'ollcuolcs tiud advaiitagoii of liis ))ailloular parcel of laud, ho hopuM, through shaor brazoii ufiHuraufo and bold proclamaliou of hie views, lo induce unvvai'y and uiiHktU'ul men lo embark Iholr means, Tiioso in turn if they bilo al tlie ball, do m, hoping to lind a new Bofc of coulldlHg oiiog, who will roliove lliem of fchoir purclawes, aud pay a proill besldeSi UbvlouBly, however, tho Bcivle of agceiidliig prioes inu«l slop Bomowliere. Il la Imposelblo for vflenub lol§ lo bo bandied from baud to luiud by spoeula- loi'H gaining each llmo au ttooi'otlou of vttlu§ wllhoul auy atfcondanlenhaueemenl ef fclie lufci'lfl» §le worlU of the pi'operfcy. The lasfc ipoGulator, Avho liai ventured his money, beoomes tli§ flnal sHlforor. Ho pays for his eredulity, and pins a vftUiftble stock of exporlonoe in return. The ease seems oven more surprising, vfhm w§ Invosfcigftle the mQilim fdpwmtt of tlies§ speeulft^ tloiis, aud dlsoov§r that these bold and flonfldent men are willing not only to plant a margin ol ready money lu their sehemes, but that they do not UeBltate to issue bonds and mortgages repre^ aentlng tbe major part of the supposed vaiwe of the land, These bonds and mortgages are mstrn- ments which have a perpetual existence until re¬ tired and cancelled by the actual payment of their face value or by surrender to the mortgagee of the property pledged for their security; and that in the case of such surrender there ig a possi¬ bUity of a judgment for deficiency being recovered upon the bond which entitles the creditor to seii?e upon, and appropriate sulfleient of the debtora other property whether real or personal to satisfy his demand. The original bond given coUaterally with the mortgage is strengthened and fortified by the voluntary assumption of its payment by each subsequent grantee, this assumption constituting in the eyes of the law an obligation, as binding iqion each of these grantees, aa if the separate and individual bond of each of them had been attached to the original mortgage. So that the obUgation of one man as originaUy uttered be¬ comes adopted and guarantied by the whole num¬ ber of grantees, who subsequently assume the payment of it. The total capital and estates of these co-obUgors become equaUy bound for the discharge of the original debt, and for any defi¬ ciencies which may arise under the foreclosure of the mortgage. It is when land speculation is viewed in con¬ nection Avith these peculiar forms of obUgations that its real and dangerous eharacter becomes apparent, What would be a reasonably sftf e trans-