Estate Record





AND     BUILDERS'    GUIDE.





Vol. XVI.





NEW YOEK, SATURDAY, NOVEMBER 27, 1875.





No. 402.





Published Weekly by

THE REAL ESTATE RECORD ASSOClATiON.

C. W. SWEET...............PfiESiBENT AND Tbeasureh

PRESTON I. SWEET...........Seoketaby.

L. ISRAELS...............;.........Business Ma.>(ager

TERMS.
ONE YEAR, in advance... .§10 00.
Communications should be addressed to

C.   "W.   STVliJET,

Nos. 345 AND 347 Broadway.





THE CRISIS IN REAL ESTATE.





It must have been surprising to a large num¬
ber of real estate owners to find that, during tuc
past few weeks, the daily press of this city has
awoke to the fact that something unusual is
going on in the real estate market. While for
months past fortunes have been swept away,
bringing untold—we speak deliberately when
saying "untold"—^miseries to the first families
in New York, not a-word was uttered ini the
columns of the daily press beyond the doleful
accounts of the market reporters, whose flgui-es
spoke volumes, but were apparently hiero¬
glyphics to the editors iu charge. They were
passed over without comment, and nothing was
said. Had Western Union dropjied, say from
93 to 48, and dragged down Lake Shore, Union
Pacific and all the rest of the stock list, sweep¬
ing away in a day or a week fortunes not half as
large as have been" dragged down by what the
lETeraZd felicitously calls "the noiseless panic"
in "real estate," columns upon columns with
startling head lines would have filled our great
dailies every morning. And still, it is perhaps
or the best that the panic has been permitted
to spread itself noiselessly, as if in accord with
the silent but, nevertheless, poignant grief it has
created among the very best of New York's citi¬
zens. Now that this silehce has been broken,
however, by the press of this city, and real es¬
tate has suddenly become to them a timely topic
for comment, it behooves The Eeal Estate
Eecobd to notice the causes which have led to
the present state of affairs, and to speak in be¬
half of OUT city and its people—^in behalf of
New York's prospective growth, and its present
importance as a metropolis—words that may
be safely placed on record for future reference.
Iu doing so, however, we express no sympathy
with the class of people who have brought the
present misery upon the real estate market, and
who haye by their wild speculations driven the
well-to-do middle classes to seek homes in ad¬
jacent towns and villages, notably in New Jer¬
sey, to the detriment of our own city.

In order to correctly gauge the present con¬
dition of real estate in New York, we must go
back and trace its rise and iallj the circum-
- stances attending and causes. creatinj< the same.
It will not do to say, like some excitable brok¬
ers: "Oh, we have seen this before, and aU
wiU right itself shortly again." To-day's
history, we say.it deliberately and defying con





tradiction, has no precedent whatever. It stands
alone, and must be judged by its causes and its
attending circumstances only. Every one will
remember that, in 1861 and 1862, Fifth avenue
lots were considered high at from $5,000 to
$8,000, and that this continued even after Secre¬
tary Chase had introduced the greenback, the
opinion then being general that gold and silver
would again be our circulating-medium the mo¬
ment the war v/as over. No one tben dreamt
that this countiy would continue to live under
a paper currency after the re-establishment of
peace. If we remember those years, and follow
therii up steadily to the present, we will find that
the rise and fall of the greenback is virtually
cotemporaneous with the rise and fall of real
estate. Other causes, to which we will pres¬
ently allude, have aided that rise and fall; but
it is safe to trace the greenback history, and
mc.asu': e by it the values of real estate. When
the war was over, and people suddenly discov¬
ered Ihat gold and silver did not come back, and
that the greenback was still all-powerfiil; when
the various measures of Congress and the de¬
cisions of Courts all combined to infuse the
theory that the greenback was to be a perma¬
nent institution, speculation set in, values rose
to an unprecedented degree, and a Eifth-avenue
lot was the El Dorado for many an investor.
This speculation was aided by the unscrupu¬
lous manipuiatiou-; of brokers, whose minds
led them to build castles (in the air) on
every vacant lot of Manhattan Island, and
their advice was followed by many a man,
who finds himself virtually penniless to-day. It
was also aided by the grasping tendencies of
loaning institutions, and spread to such an ex¬
tent that the entire unimproved part of the city
commanded a price for lots not attainable by
the prudent merchant, who was desirous of liv¬
ing in a 25,000 or 30,000 dollar house, but could
hardly get a lot-for that figtire, and hence em¬
igrated to New Jersey. Any one standing at the
ferries ia the morning can see these merchants
come, over from Brooklyn, from Jersey City,
and from all sections within a radius of thirty
miles. They would have gladly remained in
New York City, occupying their modest homes,
but they have all been driven out by the specu¬
lators of 1868, 1869, 1870 and 1871. Had not
the insuratice companies and savings banks then
encouraged these speculators by loaning them
money on vacant property at valuations which,
read by to-day's light of the market, are simply
scandalous, even the oily-tongued Pine street
broker would only have done half the mis¬
chief that he has. A loan of twenty, thirty
and forty thousand dollars on a vacant lot
by insurance companies and savings banks
was a great temptation for speculators to
go on w^ith theti' nefarious trade. And they did
it. While on one side of the town they bought
whole tracts on a small margin, they went fo
the other side and obtained some enormous loan





from this or that insurance company or savings
bank—the money of widows, orphans, and la¬
boring men.

Finally the panic of 1873 set in. Amid the
ruin of 'Wall street. Pine street, more than any
other interest, held a stiff upper lip. We used
to hear then that "real estate is in the hands of
strong holders; they can afiord to look on." So
they could, as long as money could be borrowed
to pay the interest on the mortgages. But there
comes through fhe severe laws of trade an end
to a great many things, and especiaUy to the
borrowing of money. While the speculators of
1870, 1871 and 1872 were running in and out of
the money-brokers' offices, and in and ont
of the insurance oflaces, to attend to their mort¬
gages, the financial condition of the country be¬
came an uppermost topic in men's minds. The
Congress of 1874 kept alive the hopes of specula¬
tors. The currency bill of that year induced many
timid capitalists to invest their spare funds even
in yet high-priced lots and high-priced houses
of that time, as everything indicated that the
era of inflation was to be prolonged. The Presi¬
dent's veto finally put a stop to this, and from
that period dates the actual cessation of activity
in the real estate market. Still the speculators
died hard. On they fought, with a perseverance
worthy of a better cause, and caught hold like
drowning men of every straw that came in their
way. This very year, while trade and com¬
merce were languishing and capital was lying
idle all around, they rebuilt all their hopes on
Ohio. That State was to pronounce for infla».
tion, sure; so would Pennsylvania, so finally
would the entire Union in 1876. But it
so happened that the people of Ohio, as
well as the people of Pennsylvania and the
people of the entire Union, at the first opportu¬
nity given them, pronounced emphatically
against inflation, declared in unmistakable
tones that the greenback should not be a per¬
manent institution, and decreed that a sound
system of finance should control the affairs of
this nation. This declaration by the people of
all the States was the last feather on the camel's
back.    The speculators' last hope was gone.

The first'of November found the Exchange
Salesrooms filled by auctioneers and referees, en¬
forcing the decrees of courts against those who
had defaulted on their interests. While for two
years previous that room bad been fhe scene
of all sorts of transactions, the mysteries
of which no man could unravel, the mortga¬
gees fmally took possession, and they are hold¬
ing it now pretty steadily, with a fair chance
of fighting it out on that line, even if it
takes all winter. Some of the choicest pieces
of property have been offered, especially
during tho past two weeks, but nobody appears
anxious to invest, though aU sorts of opportu¬
nities are offered to bidders, and in nearly everv
instance the plaintiff or mortgagee is nermitted
to purchase the property at his own figures, and