Sec. 311. In this connection study Sections 134 to 139 of Text Book, together with Forms Nos. 87, 88 and 167.

Sec. 312. In addition to the three modes of placing subdivisions on the market, as mentioned in Sec. 134, there are at least two other ways, namely: First, by organizing a corporation, and issuing stock to the incorporators according to their respective interests, and letting them share in the expenses and participate in the earnings in proportion to their holdings of stock. In such case, all of the details of the subdivision become a matter for the directors and officers to act upon and execute. Second, by dividing the estimated expenses of the subdivision into an equal number of units and taking subscriptions for such units, as set forth in Form No. 155, payments on account of such subscriptions being made as indicated in said agreement.

Sec. 313. Where the property is placed on the market, indicated in Forms Nos. 88 or 155, a payment is made to the owner by the person or persons engineering the deal, and the owner thereupon conveys the property to a trust company or bank absolutely, and such deed is placed of record, so that the trust company or bank appears of record as the sole owner. The trust company or bank issues a declaration of trust, similar to that shown in Form No. 88, and bearing the same date as the deed, but this declaration of trust is not placed of record, for the reason that, if it were placed on record, all of the parties to it would have to join in each deed or contract for the conveyance of lots. The trust company or bank is in a safe position, as the title to the property is vested in it, and it receives and handles all of the moneys and makes partial payments on the indebtedness due the owner until such indebtedness is extinguished. The taxes, expenses and commissions are also paid by the bank or trust company, the bills therefor being first O. K.'d by the beneficiary or subdivider. Form No. 155 is a plan devised by Mr. J. B. Leiser, of Los Angeles, and is designed to assure the investors in a subdivision proposition that they will receive fair and equitable treatment at the hands of the agent. A subscription agreement, such as this, ought to make it easier for an agent to induce capitalists to join him placing a tract on the market.

Sec. 314. Lots in subdivisions are usually sold on contracts (Form No. 7) which are neither acknowledged nor recorded. The contract-purchaser does not appear at all in the public records as the owner of the lot he has purchased. The contract-purchaser in such case has to depend a good deal on the integrity and financial responsibility of the subdivider, and oftentimes the latter is deeply indebted to the owner for the lots. In a recent instance, a party purchased a number of lots at $150 each and paid cash in full for them. He sold the lots on contracts at from $300 to $600 each, payable one-third in cash, and the balance in six months and twelve months, with interest on the deferred payments at 7% per annum, payable semi-annually. Desiring to raise money to buy more lots, he borrowed from another party on the lots he already owned a considerable sum, giving his note therefor, secured by a deed of trust on the lots, with privilege of having any lot released from the trust deed upon the payment of $200 in cash, this provision being inserted to enable him to make delivery of the lots to his contract purchasers as they made their last payments. He failed to pay his note, became bankrupt, and the other party became owner of the lots, and the contract-purchasers lost what they had paid for the lots. Contracts for the sale of lots should be just and equitable in their terms, both to the seller and to the buyer. Form No. 154 is an example of a loose-jointed contract, wherein the payments made are treated as so much rent, and which provides, in two instances, that the seller may, in lieu of doing what he is supposed to agree to do, return to the purchaser the money paid with 6% interest thereon, and gives notice that the contract issued to the buyer is based on a prior contract between the seller and another party, leaving the buyer to draw the inference, if he is shrewd enough to do so, that if the provisions of the prior contract are not carried out by the seller, the contract with the purchaser will fail also. The purchaser rarely takes the precaution to ascertain what the provisions of such prior contract are. The profits on subdivisions, when carried on in a legitimate way, are ample enough, and the small investor should be assured that when he has paid for his lot he will receive a marketable title and fair treatment.

Sec. 315. Form No. 156 is a Sales Report to be used by the tract agent in making daily reports to the main office of sales made by him. The tract agent turns in daily to the main office one of these slips for each lot sold by him, together with the amount of the deposit thereon received by him. By means of these reports, the main office is kept advised as to lots sold, who the purchasers are, and when they will call to receive and sign contracts of sale.

Sec. 316. Payments on lot-contracts are made direct to a bank or trust company, if sold by the latter. Where the lots are sold by an individual, the lot-contracts are generally placed in a bank, and the purchasers are notified to make payments at the bank (as a matter of convenience) for the account of the seller. Lot-contracts are issued in duplicate, and the purchaser, when he makes a payment, brings his contract and has the payment endorsed on the back thereof as per form No. 157. The contract held by the bank is kept in an envelope like form No. 158.

Sec. 317. Restrictions as to the value of the building, and the distance it is to be from the front line of the lot and from the side line, and as to prohibiting the conveyance of the premises to any but members of the white race (see Forms Nos. 5 and 87) have been pretty generally adopted in respect to high-class subdivisions of late years. A good deal has been said pro and con as to the value of building restrictions. It has been argued that these restrictions are handed down indefinitely from seller to buyer and impose needless hardship on one's liberty to do as he pleases. The tendency at the present time is to so word restrictions that they expire by limitation after a certain time, say five years. When lots in a high-grade subdivision are first placed on the market, restrictions are of value in assuring purchasers that the lots in the tract will be improved in a corresponding and uniform manner.

Sec. 318. In placing a subdivision on the market, the attractive features, such as desirability and easy access of location, water piped to every lot, cement sidewalks and curbs, graded streets, fountains, parks, and archways at the entrance of the principal streets, should be carefully thought out and executed. As soon as the tract has been surveyed, a plat of same should be made, and the tract should then be well advertised, and inducements, such as a discount, offered to early investors. An opening day should then be announced, and free transportation offered, obtainable at the town office of the tract. Interest in the tract should be worked up in every possible way, and one or more agents should be on the tract daily to show lots to intending purchasers. A quarter-page, half-page or whole page of one or more newspapers should be covered with a well-displayed advertisement of the tract. Wealthy people have their homes in courts and places where they are exclusive to some extent by reason of price as well as by entrance gates and archways, and the entrance gate and the archway are factors to be reckoned wiith in opening up tracts for the so-called middle classes. While the advertising and hurrah goes on, lots sell readily, as a rule, in new tracts, but the sale lags when the interest fags.

Sec. 319. Lots are sometimes auctioned off with brass-band and barbecue accompaniments. The following are extracts from a recent announcement of an auction sale of this kind:

Grand Auction Sale of Business and Residence Lots and acreage at the new townsite of BENEDICT on the new Santa

Ana Electric Railroad, 30 minutes' ride from Los Angeles. Commencing Saturday, March 17th, 1906, at 10 a. m., and continuing on following Monday if lots not all sold. Call at our offices for particulars. Lots valued at $2,000 given away free.

We desire the ladies present. A large number of ladies always attend our sales, and they are often the shrewdest buyers. Hundreds of families are living in their own homes today, because the good wife bought a lot at our sales. We are always glad to see them, and pay especial attention to lady buyers.

We have arranged very easy terms, that will enable each and every one so desiring to buy a lot and pay for it without missing a dollar so expended. The terms will be only $25 down on each lot, balance payable $10 per month. An unlimited certificate of title will be furnished with each purchase free.

Remember, we make an auction sale of this Townsite in order that a large number of investors may become interested with us quickly. We expect to get value for this subdivision, because we believe that our loss now will be your gain, and because we are convinced that our present loss will be more than compensated by the enhancement in value of the lots remaining unsold. After having spent months in looking Over Southern California and studying its prospects for the future, we have every reason to believe that there is not a foot of ground anywhere in Benedict but will sell, in a short time, for five to ten times the auction prices. We have the best and most healthful climate, and the most productive soil in the world. These well-known facts are yearly drawing thousands upon thousands of families from the East; and, after spending one year in our delightful climate, very few there are who will be satisfied to endure again the rigors of an eastern winter. Tell us where a man can find more to please and benefit him than in the beautiful townsite, Benedict, on the electric car line, thirty minutes' ride from Los Angeles.

Five lots worth $2,000 given away free during the sale. The lots are given away simply as an advertisement to call the attention of the general public to our tract, as we know that the distribution of these presents will attract the attention of many persons who otherwise would not attend our sales; and if they once see the desirability of our lots for residential purposes or speculation, and the low prices for which they will be sold, the public will undoubtedly purchase in our tract, instead of in some less favored localities.

Remember, no one need buy, or even bid on, a lot to receive the presents. They are given away Absolutely Free to those who attend the sale as well as to those who do purchase.

How the lots are given away: Every man and woman who attends these sales will receive a ticket free entitling them to participate in the Grand Distribution, providing they are at the sales before 1130 p. m. Coupons will be taken up at 1130 p. m. each day, and lots will be given away at different times until the sale is over, which will be about 4 p. m. Don't fail to come. The lots are free. No lottery. No charge.

COMPLIMENTARY: This ticket No. 15935 Entitles the bearer (if at the sale) to participate in the GRAND DISTRIBUTION of $2,000 WORTH OF LOTS to be given away FREE at the GRAND AUCTION SALE OF LOTS AND ACREAGE at town of BENEDICT on Santa Ana Electric Line, Saturday, March 17, 1906, at 10 a. m., or at any postponement thereof. (Good for anyone over 18 years of age, whether he purchases or not.)

(Coupon) - No. 15935 Tear off this coupon and give to collector on tract. KEEP LARGE PART until drawing is over.