For years & years some 18 mortgage companies went blithely ahead guaranteeing the interest & principal of the mortgages they sold to the public until they had guaranteed 35% of all the mortgages in New York City. Of course they never dreamed that they would ever have to make good on any but a small fraction of this $3,000,000,000 contingent liability, but the worst happened. When Depression set in, mortgages defaulted, foreclosed property could not be sold and investors instead of buying new mortgages to replace the ones that matured, loudly demanded their...
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