A mortgage covering several different properties, or a collection of properties, and given to secure a single debt, or sometimes given to secure indebtedness previously created in different forms. When a mortgage of this kind is given, an underlying lien (indebtedness having prior claim) is generally implied. The usage of this term is, after all, somewhat vague. It is occasionally applied in about the same sense as " general mortgage," but, the writer thinks, improperly so, unless, possibly, upon a system composed of two or more companies, for there is, perhaps, this difference: The latter covers property owned by one corporation, and used in the general conduct of its business, as a railroad, for instance, whereas a " blanket mortgage " more particularly covers several separate properties, each of which may have no similar or common use with the others. A mortgage might be issued to cover a property under construction, and so worded as to also cover the property when completed; all equipment, future acquired property, etc. This would really be a " first mortgage," and so called, as there is a certain dislike to the term " blanket mortgage," and, although in the case just cited the mortgage might also be considered a " blanket" first mortgage, on account of its liberal provisions in regard to the future, no one would think of using that word in such a connection.
1 There have been other days than the one mentioned above which are also referred to as " Black Fridays." At the time of the failure of the large London banking house of Overend & Gurney, May 11, 1866, a catastrophe followed which resulted in the designation of " Black Friday " for that day.
2 United States Treasury Department Circular, No. 72.
The present tendency in creating mortgages is to eliminate the " future " or " hereafter acquired " clause, as it may become troublesome when companies desire new property and must raise additional funds for the purpose. To be prohibited from so doing on account of being obliged to place new property under an existing mortgage, may be a hardship. It is often possible to get around this restriction, however, in many ways; as by the issue of a " purchase money mortgage " or an issue of bonds by a separate corporation, guaranteed by the parent company.