It is astonishing to people who have not gone into this subject, yet careful investigation shows that the building loan operators in this city have made it possible for a man with $5,000 to complete an operation involving $100,000. A number of these builders with lots of nerve and little cash have come to grief; a number have built up a fortune and a reputation by just such methods, and the building loan operators themselves have reaped a golden harvest for the risk they have taken.

It has been possible for a man with little capital to finance a large operation, because the operator, the loaning institution, and the speculative builders all have had faith in the value of the property, and have believed it worth not only one hundred cents on the dollar at cost, but one hundred and ten cents for sale, and that each year will add to the value of the land, making up for the depreciation in the value of the building.

Building loans in New York City are generally made for one year at 6 per cent interest, secured by a mortgage on the property, known as a building loan mortgage, which has varied clauses, differing materially from other mortgages, and is accompanied by the necessary bond, and by a building loan agreement, which recites, as provided by statute, in what manner and form the building loan will be made. It is necessary to record this building loan contract as well as the mortgage, and thus give notice to those who sell material, or do contract work for the builder, how much he is to receive at various dates. The loan is generally made in several or many different advances, as the work upon the building progresses, and the building loan contract recites these various stages at which money is due.