Tuesday, June 29, 2010

Questions for Curatorial: Mortgages

Curatorial Director Dave answers your questions. To submit a question, leave it in the comments or on our Facebook page.

Did mortgages exist during the 1860s when 97 Orchard Street was built and was it possible that Lucas Glockner, the building's original landlord, had one?

Yes, mortgages did exist, but they were not forthcoming from established mainstream banks and businessmen. And while no record of a mortgage on 97 Orchard Street exists for Lukas Glockner, it is entirely possible that he and Adam Stumm and Jacob Walter -- who all invested in property on Orchard Street together -- were extended credit by an unlicensed loan operator.

According to contemporary observers, rates of failure were extremely high and investment in local tenement property was tantamount to gambling. As these institutional lenders in most cases refused to advance credit to small-scale tenement builders, they turned elsewhere to access credit and other pools of capital.

Indeed, in New York City and elsewhere, banks provided loans to borrowers with tangible, secure assets. What is more, established banks and credit agencies made no efforts to overcome barriers of language or culture -- they placed no branches in immigrant neighborhoods. Lastly, building and loan associations, as well as life insurance companies, avoided investing in tenement property until the 1890s.

Instead, small-scale investors in tenement property, like Glockner, turned to unlicensed lenders or operators of so-called "immigrant banks." Frequently serving much broader roles within their communities, un-chartered immigrant banks often acted as notary publics, rudimentary postmen, lawyers, employment and steamship agents, and real estate brokers. Indeed, as historians Fredrick Binders and David Reimers have noted, they “emerged as central actors in the social networks that coordinated the process of immigrants’ relocation to the new world.”

-posted by Devin

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