Estate Record





AND     BUILDERS'    GUIDE.





Vol. XVI.





NEW YOEK, SATURDAY, DECEMBER 25, 1875.





No. 40fj.





Published Weekly by

THE REAL ESTATE RECORD ASSOCIATION

C. W. SWEET...............Pbesident and Tbeasubeb

PEESTON I. SWEET... w......Seoketaby.

L. ISEAELS.........................'Business Manageb

TEEMS.
OWE YEAR, In advance....$10 00.

Communications should be addressed to

C.   "W.   ©TVESETs

Nos. 315 AND 34.7 BeoaD-WA-T.





THE CRISIS IN REAL ESTATE.





IV.   ,

The Eeal Estate Eecoed lias in previous ar¬
ticles sketbhecl many of tlie ca-ases that have
produced the present   stagnation in the real
estate'market.   In preaentiiig these causes,-we
have torn off the mask that  has  heretofore
veiled the doings of the land speculators lo the
unwary outsiders. For this we have been abused
in some quarters, but have received abundant
praise in other directions.    With an honest de¬
termination to discharge our -whole  duty  as
journalists toward that great class of investors
who looii to this journal as the true and only
exponent of all that pertains to the real estate
market, its past and present history, we continue
to-day to re-view additional causes that have
aided to bring about a state of affairs decidedly
without precedent in the annals of New Tork.
The effect of this plain speaking on the part of
The Eecoed has been thus far that, -while for
months past not even the slightest interest -was
taken in the market, while a complete lethargy
overhung everything connected with real estate,
we now hear of re-viving interest on the part of
solid capitalists and renewed inquiry about the
state   of the  mjarket and the probable price
at which certain jjieces  of property can be
bought.     Those who still preached their  in¬
flated   ideas  have   lowered   their, tone   and
are resigned to look stern facts in the face—
facts such as are daily demonstrated  by the
foreclosing process of leading operators of the
past, by the widespread ruin among those over¬
loaded "with vacant property,.and the failure of
upto-wn banks built upon the hopes and not the
cash of blatant speculators.    While the field is
thus being cleared for renewed activity at low
prices—siire to follow the pressnt stagnation—
we will do our share toward preventing the re¬
currence of methods and tactics that forever
must be eschewed in the sale and transfer of
property on Manhattan Island.   We have had
enough of Wall street tricks in the real estate
market in the past.     In the future,  let the
honest investor, when he lays down his hard-
earned doUars to buy himself a home, be satis-
fled that tie people he deals -with are as solid
as the. ground he seeks to acquire.   The real
estate  of a  vast and  growing city is not a
field   for the  play   of   imagination,   as  are





the shares of some distant -wild-cat concern.
It is too "real," indeed, as those have by
this (ime found out to their sorrow who
in the past have placed faith in the predictions
of   would-be  "keen   and  shrewd"   operators.

BEOKEES AND AUCTIONEEES.

We have in the Beal Estate market a number
of these gentlfemen, the large majority of whom
are honorable, conservative business men.- They
are a credit to ova community, and have earned
their positions by long years of faithful service.
There are,- however, a number of speculative
and reckless brokers who mistake their calling.
Wall street is their proper field, and not Pine
street. They are an incubus on the market, and
think they can handle a block of solid upto-wn
lots and cram them down the throats of in¬
vestors -with the same ease as if they had 40.0
shares of Erie to seU. Not that these men fail
in perfecting transactions, but their nonsensical
palaver about matters they do not understand,
their ignorance of a trade that requires the most
thorough information—their ever bullish ten¬
dencies are enough to disgust any one com¬
ing in contact with them ; and they virtu¬
ally injure the business of the legitimate
broker, who unfortunately is classed with
them by the uninitiated outsider. How
they ever expect to earn their daily bread in the
Eeal Estate market, as it is to be conducted
hereafter, is a mystery we cannot fethom. The
practice of knocking property do-wn to Mr.
Smith or Mr. Jones without selling it is fortun¬
ately not so common among the auctioneers as
in times past. Indeed many of the most promi¬
nent among them, even when the owner instructs
them to knock it down, nowadays willingly
voluSteer the information that the property is
not disposed of. Still it would be far better if
the rules of the Exchange Salesroom should
requite each auctioneer to loudly proclaim the
name of the buyer. Then those interested can
readily ascertain for themselves whether the
property has been bought in or disposed of.
Some auctioneers do so now, and we trust all of
them will do so whenever the "plaintiff in the
suit" shall be no longer the ubiquitous buyer at
the Exchange Salesroom.

POOLS AND ErsrGs,

During the speculative years of-1870, 1871,
and 1872 there were several ''real estate pools"
and rings. . They were a great lever in the hands
of those working for inflated prices, and they
must be remembered with chagrin by those who
participated in them. Immense operations, as
if by syndicates, -were conducted by them,'some
parties having a fourth or an eighth interest in
the pool, others having one as low as a sixteenth.
Of course there is a far greater stimulus to pur¬
chase when there are a number of buyers joining
one another, than if-the property, is offered to
single individuals.   When the crash comes, the





burden is finally thrown upon the strongest and
most responsible of the "pool." At first he has
to bear the brunt of the entire transaction, keeps
on paying interest on the mortgages, while his
partners have defaulted, until at last he is him¬
self driven to the wall. When it is remembered
that the parties originating these pools have
taken in retired merchants, who considered
themselves dealing in staple values, and now
find themselves ruined, the nefarious charac
ter of such schemes ought to warn future in¬
vestors against all propositions like these.

The game class who in the past hare been con¬
stant promoters of pools were also dealers in
"points." They always have a "point," as in
Wall street, and for that "point " they used to
get their one-ststeenth share of the pool. If
the speculation fails, the parties participating
are loaded with mortgages and ironed for any
other business they may be engaged in, thanks
to the man with his "point." This pool
business is done on contract and is binding,
sho-wing that WaU street tactics transplanted to
Pine street are extremely dangerous.

Before concluding this chapter we must not
omit to sketch some of the subtler aud more in¬
sidious artifices df^the speculative campaigners.
These are the rumors and inventions they spread
through the market. The prospective erection
of a church, a hotel, or other large structure,
although the land may be unpurchased and the |
plans unformed, affords a first-class basis for ae- i
tivity and enhancement of values in the estima- /
tion of these gentlemen.

Property lying adjacent to the imaginary im-
■provements changes owners, profits are reaped,
and commissions earned.   The rumor serves its
puj"pose, even though the contemplated struc¬
tures never appear.    The Industrial Exhibition
building, the new Episcopal Cathedral, and that
unfortunate waif— a Central Park Hotel—are apt
illustrations of our idea.   That other creature of
the imagination on which we here bestow no
stronger term than invention embraces assurances
of large purchases in certain localities by leading
operators, foreign capitalists, or builders.   The   |
contemplated opening of streets, boulevards and
parks, aU clearly displayed on paper, but doomed   \
to have no other existence—these and kindred   ^
devices are sufficient to start the nimble feet and
unloose the facile tongue of operators.   The   '
strong delusions which periodicaUy or chronic¬
ally take possession of the real estate devotee
are subjective faults of his ardent nature, bom
of civic enthusiasm or a profound conviction of
the inestimable value of eveiy cubic inch of
Manhattan ground.   Calculations of the annual
increase pf population enable the real estate seer
and prophet to determine how many square
inches of land -wiU be aUotted to each inhabitant
attM the lapse of a given number of years.

_ Compjirison of values, with; pyercroyirded and
feudal Eoropeau cities has fui'oished the stapl^