J. Lewis Cochran, Edgewater
Note: This article first appeared in Chicago Real Estate magazine, May 1921, pages 7-8.
J. Lewis Cochran, Edgewater
A Community With Character Back of It
For biography of the kind which we must often see in the periodicals of the day we do not much care; but for biography that comes to us through a record of achievement due to the forethought and enterprise of some young man there is nothing that is more inspiring. For biography is without doubt the most profitable of all studies for men who have to learn and work. The biographies of men with whom we have been associated even remotely should interest us and bring us to a realization of the merits of others. We are all conscious of the defects of our friends; in fact. too conscious, but are we duly appreciative of their worth? If we are not the more we know about them the better; seeing what worth-while men they are inspires us to higher aims and ambitions.
When I thought about writing this sketch I decided that the introduction would be something like this: “To have a theory and to follow it is the road to success in life.” That was one of the remarks of the subject of the sketch when I first met him. Then when I left him he said something about a conference with some of his associates concerning the extension of his business, concluding his remarks on that occasion with: “A live fish swims up stream. Now, boys, let us see whether we are live fish or not.” This was pat, very pat. His remarks were so good in each instance that I thought I would use both of them.
This is preliminary to something about the development of Edgewater and the mortgage banking business of Cochran & McCluer. Edgewater was the creme-de-la-creme of subdivisions, an ideal residential community. Now it is an ideal residential part of the city of Chicago. The credit for the commanding position which Edgewater occupies in the minds of the people is due to John Lewis Cochran of Cochran & McCluer, community builders. Mr. Cochran below tells us something of his ambitions and his achievements as well as some of the trials he has passed through. They may be of value and assistance to other young men who are seeking light.
I came from Philadelphia to Chicago when I was 23 to become the assistant manager of the Durham Tobacco Company. Chicago then had a population of a little over 500,000. I had no knowledge or experience in the real estate business or in building, but it will be seen that I was quickly drawn to it. When I saw the lake and the Lake Shore drive I came to the conclusion that the people of Chicago did not appreciate the beauty and the value of the shore frontage. Its beauty and charm appealed strongly to me and I thought of its wonderful advantages as a residential section.
I longed to embark in real estate business and it was this locality that attracted me more than anything else. But I did not get in on the Lake Shore drive, as practically all of the vacant frontage on the drive belonged to Potter Palmer and the Catholic bishop, and they held it at $1,000 a front foot. This was in 1881, but I wanted to get in and I bought a number of pieces of land, of which I sold all at a profit. I had an idea and I followed it. It was this – that I must hug the lake shore in my operations.
I bought 100 feet in Oak street near the drive; I bought 200 feet in Elm street and built a row of houses, which I sold. They are in good condition now. I bought in North State street between Schiller and Burton place. This was purchased from the Catholic bishop, and I sold it to Potter Palmer within a year at a profit.
Then we operated in the frontage skirting Lincoln Park and north along the shore. I bought and sold in St. James place, Deming court, Evanston avenue, now Broadway, up to Edgewater. All this time I continued to operate along the lake, and finally I bought 380 acres, comprising Edgewater. You see, I named it Edgewater, as that was following out my theory.
When one left the north boundary of Lincoln Park one got into a pretty thinly settled country. There were no street cars, nor gas; Evanston avenue north from Bryn Mawr was all sod; I used to canter my horse there. There was no electric lighting system. I went about to build one. I located a plant at Edgewater; built and put it into operation. Later I sold it to the Chicago Edison Company.
Then we wanted transportation. There was a horse car line in Evanston avenue from the “limits barn,” as it was called, north one and one-half miles to Montrose avenue. I wanted Mr. Yerkes to change it to a trolley line and build north to Evanston. He laughed at me and said he would some time, but that did not satisfy me. Then I conceived the Chicago and Evanston Electric to connect with the horse car line. The building of this road was the hardest task I ever undertook. I obtained all the right of way and all of the frontage consents myself, and along with the late Marshall Field, John J. Mitchell, Samuel Insull and Charles L. Hutchinson, I built it. It was seven and one-half miles long, equivalent to fifteen miles of single track. We subsequently sold it to the North Chicago Street Railway Company, Mr. Yerkes’ line.
My aim was high in the development of Edgewater. I determined that it should be the best residential community that had ever been built. I put in the best landscape improvements possible, not that it should look well only, but that it should be substantial and durable. I not only sold carefully restricted vacant residential plots, but I built and sold many houses. I not only made the best improvements, but it was my desire that the community should have character. It was of such a character that when it came to the matter of the development of other and surrounding communities that the promoters of them specified that the development should be similar to that of Edgewater.
The mortgage banking business of Cochran & McCluer is the natural outgrowth and enlargement of the business of the house which had its beginning forty years ago, when Mr. Cochran began under his own name to operate in real estate and which has since been conducted under the name of Cochran & McCluer, the latter, William B. McCluer, having been associated with Mr. Cochran as a partner for many years.
The mortgage banking business of the house had its inception with the opening of the subdivision of Edgewater. It was necessary for them to finance, or, to express it more simply, to provide funds for people who bought vacant lots and who wished to build homes. Then they built and sold houses to people who could only pay at the outset part of the purchase money. In this way mortgage banking became an integral part of their business; because of their high standing and honorable methods, and with the substantial securities thus created they built up a large following eager to place their funds through this house until now the business has grown to such magnitude that to meet the requirements of their friends and customers they must enlarge the scope of their operations.
During their forty years in business, they have issued and sold many millions of first mortgage securities without a blemish on their record, an accomplishment not due to chance or accident. This is an achievement that can result only from a careful and competent organization, and a scientifically sound system for safeguarding investments.
The same methods that have governed their operations in the past will characterize their business in the future. Everything they have done has been done well. They will develop and make theirs a real investment house – an investment banking house in the best use and application of the word banking. In underwriting bond issues they will specialize in the choicest locations, place the funds of those who invest through them in properties of the highest type with an assured future.
Commenting on their desire to enlarge their loan and bond business Mr. Cochran said:
We have had the enlargement of our loan business in mind for a long time. It is a preferred business. It repeats. When loans are paid off lenders like to have something else of a similar character in which to place their money.
What I mean when I say that mortgage banking is a preferred business is that it is preferred on account of the unusual opportunity it has for service – the up-building of our city, supplying an ever increasing number of modern homes, of which we are at the present time so much in need: furnishing labor to thousands of artisans, and a security of unimpeachable character for the savings and accumulations of capital, making it possible for every investor, large and small, to have a share in the development of the city without whose aid and cooperation modern improvements and the many things that go to make our lives more complete would be impossible.
This brings to mind a singular circumstance in our experience in the investment of our own funds which may be of interest and perhaps of value to others who have money to invest. A few years ago we had on hand around $800,000 of choice first mortgages on Chicago real estate. We had selected them ourselves; we knew how conservative the loans were, but we thought that some time we might desire to use a large amount of money, more than we had on hand, and would require greater accommodations at the bank and the bank might require a different class of security. I then took $200,000 and invested it in railroad bonds and stocks, securities of a high order. This was what I thought the banks would desire – something that was liquid. Banks want collateral that is listed. When it is listed on the stock exchange they call it liquid, so they can dispose of it at any time. You need not look at the list. You can imagine how much is lost if I were to dispose of these securities at today’s prices. We would be much better off had I allowed the $200,000 to remain in our own mortgages bearing interest at 6 per cent.
The past is the key that unlocks the future. It was thus that they began and it is thus that they will continue.