Real Estate Record





AND     BUILDERS'    GUIDE.





Vol. XVII.





NEW YOEK, SATUEDAY, MAY 27, 1876.





No. 428.





Published Weekly by

THE REAL ESTATE RECORD ASSOCIATION

C. W. SWEET...............PBESIDEfn; AND Tbeasdbeb

PRESTON L SWEET...........Secbetaby.

L. ISRAELS.........................Business Manager

TERMS.
OJVE YEAR, in. adv.aiice....$10 00.

Communications should be addressed to

C   SV.   STREET,

.   Nos. 345 and 347 Bboadwat.





THE EATE OF COMBINATIONS.











During our paper money era a nuir.ber of
combinations came into being for the purpose of
controlling prices and taxing the community.
They were quite successful during that excep¬
tional period.   But there seems to be some law
operating    in   human   society  which   works
against any device or arrangement by which an
exceptional profit is charged for any description
of  human   labor.     Political economists have
pointed out that any business which pays more
tban a fair rate of interest is tolerably sure, in
time, to come to grief, because it provokes rival¬
ries, encourages extravagance and waste, and in
time the exceptionally profitable business be¬
comes   exceptionally unprofitable.     A marked
instance of tbis change is shown in the famous
coal combination.    The anthracite region com¬
prises only a small patch upon the surface of
the map of Pennsylvania.    Some five railroads
and transportation companies have access to
this   limited   area   of    country,  and   all   the
conditions seem to exist   for   a   combination
which   would   put   the  business   entirely   in
the hands   of  the   corporations   which   own
the mines and control the transportation.    Then
there was much to be said in favor of some
such    combination,    and   indeed    the    com¬
panies were partly forced into it,  for they had
an exceptionally large demand during the win¬
ter season and a small demand durii.g the sum¬
mer season,   xhis led to fluctuations in prices
which were ruinous" to   any regular industry.
The price of coal varied so greatly that foresight
was out of the question, and the business became
a mere gambling operation.   All these points
were very clearly stated in the address to the
public by Mr. Franklin B. Gowan, President of
the  Philadelphia and Eeading liailroad.     He
headed this combination,  and  his   argument
seemed irrefutable that it was best for all con¬
cerned that the railroad companies should own
the mines, dictate the prices paid for labor and
fix the late that should be paid for coal.  But
unfortunately the only interests represented in
the councils of this combination were those of
the companies themselves, and the temptation
to fix a high rate and maintain ii, was too great
to be resisted.    The combination of capitalists
fought the combinations of working-men and
beat them.   They succeeded in reducing the





price of labor to the lowest possible limit. They
have also succeeded for several years past iu
keeping up the price of coal at far higher
rates than those which obtained during the
war and up to 1871. But evidently something
ails this combination. All the four railroads
have been losing money; their stocks are falling
in the market with great rapidity. Only one of
the four operating roads is known to be paying
expenses. The Delaware and Lackawanna, the
Consolidation Coal, the Eeading, the New Jersey
Central and every other company, saving alone
that owned by the Pennsylvania Coal Co., have
passed their dividends, and have lost heavily by
the failure of small coal operators to meet their
engagements with them. Their stocks have de¬
creased 20 per cent on the market, though they
have succeeded in keeping up the price of coal.
This has led to bitter complaint from manufac¬
turers, who say that in. these hard times, when
everything was needed to help manufacturing
industry, a figure was put on coal which made
the starting of the furnaces in the iron working
region out of the question.

In fact, any associated enterprise which in"
volves more than one business is in very great
danger of coming to grief. Mining is one busi¬
ness by itself, and railroading is quite another.
The tendency of all industry in modern times is
towards this specialization of functions, and not
towards their consolidation. The same men
who are energetic and wise in railroad matters
would very likely be found at fault in their judg¬
ment in dealing with mines and other allied indus¬
tries. It is now announced that ten great india-
rubber manufacturers of the country have entered
into a combination for five years, for the purpose
of preventing any competition in the prices of
rubber goods. This corporation proposes to fix
its price, not to deviate, and each of the ten com¬
panies to be confined, as far as possible, to its
own local trade. It is safe to say that, as in the
case of the coal combination, this monopoly will
in the same way be broken up. It is .'an un¬
natural state of affairs, and however prosperous
it may seem at the beginning, is sure to develop
inefficiency and waste, just so far as the profits
exceed a fair interest upon the money invested.
We judge the day cannot be very far distant
when the great sewing-machine combination will
also come to grief. The managers indeed have
admitted for some time past that the business as
a whole did not show a profit. As is well under¬
stood, the whole sewing-machine business of this
country is virtually a part of one great combina¬
tion. These consolidated companies not only
manufacture the various machines, but they
wholesale, job and retail them. In other words,
the makers of the machines have endeavored to
get rid of the intermediaries with the public
which other trades find so.indispensable. If
the theory of the coal companies, the sewing-
machine people   and the india-nibber com¬





bination is correct, then society is all at
fault in recognizing the usefulness of the whole¬
saler, the jobber, the retailer and the broker,
and the proper way to conduct business would
be to convert everything into a monopoly. We
refer to these matters, because it' is doubtful
whether we can ever have a real revival of bus i
ness until these great and unwholesome com
binations ara broken up. If the consumers had
a voice in the councils of these combinations
there might be some hope for .them; but it is
asking too much of human nature to suppose
that people who have a monopoly of any de¬
scription of goods should not endeavor to profit
by it to the very utmost. The end of the coal
combination cannot be very far off. The india-
rubber combination is tolerably sure to come to
grief in time, and the condition of the sewing-
machine industry will not become wholesome
until free competition takes the place of thepref-
ent unnatural alliance between rival companieF,
and their practical conspiracy against the sew¬
ing women of America.

------------------♦ <^» «------------------

EAILEOAD TO PITTSBUEGH.





The project for a new air-line railroad between
New York and Pittsburgh is rapidly assuming
shape. By direct communication with that
point ninety miles could be saved on all western
bound Ireight. Such a road, if it repaid simply
the interest on the money invested, and the
management were under restraint as to combi¬
nations with other lines, and restricted from
charging exorbitant rates, would be of immense
benefit to the trade of New York City. We have
no faith, however, in organizations for such a
road, which are similar to other railroad
schemes. Such a line should be built either by
by the city of New York or by the States
through which the line will run. It would
reduce freights from the West at least one-
half, and would be a perpetual restraint
upon the roads which centre in New York.
Such a road would restore to New York aU the
business which has been drawn away firom it by
the efforts of the people of Baltimore, Boston
and Philadelphia. The projectors of this con¬
templated road may as well understand that it
is idle to get up an organization for the purpose
of being bought out, or to be built by the ex¬
travagant issue of bonds, or any of the older
methods of manipulating stocks for the benefit
of individuals rather than of the community.
New York urgently needs such a road. Its
cirnstruction and proper management would
add 20 per cent, to the price of every lot on
New York Island. It would pay. our property-
holders alone to build such a road and run it
entirely in the interests of this city, without any
reference to profits; but we do not see any
means by which this can be accomplished; and
we suppose that if euch a road is projected it