Real  Estate   Record





AND BUILDERS' GUIDE.





Vol. XVIII.





NEW YORK, SATURDAY, DECEMBER 30, 1876.





No. 459





Publislied Weekly by

TERMS,
ONE YEAR, in advance.., ,$10.00.
Communications should be addressed to

C.  W.  SWEET,
Nos, 345 AND 347 Broadway.





real ESTATE AS AN INVESTMENT.

Having set forth Avhat we conceive to be the
true theory of land speculation, and defined the
conditions under Avhich sound investments in
real estate cau bo made, Ave now come to consider
the distinctive merits of real estate as an invest¬
ment. Entered into upon the basis of false or un¬
wise conditions, or with a purely speculative aim,
we can conceive of no financial outorprise less in¬
viting, less likely to possess substantial merit, or
more certain to result in disappointment, disa,ster
and ruin. Tlie present times, and the prevaUing
experience in the real estate world, are not favor¬
able for a bright or cheerful outlook of our sub¬
ject. The situatiou, on tliis very a/:count, emphat¬
ically calls for the enunciation of the true prin¬
ciples Avhich determme sound land iuA'estments,
and for the definition and Umitation of the hopes
and expectations which may be safely founded
thereupon. When tried by the touchstone of
merit, and the application of sound principles, we
thmk it wiU be found that the great majority of
disasters now being recorded in the real estate
market, are lacking in some or aU of these great
essentials. We venture t^ assert, without fear of
contradiction, that in tho coffers of our large
estates, and among the a&sets of our best financial
institutions, no investments wUl be found to afford
a more soUd seiise of security or more complacent
satisfaction than the wise, cautious and prudent
investments heretofore made in real estate. In¬
deed, these vast estates, so numerous and bulky,
which uiiiquely characterize our metropoUsare
real exponents and exemplary iUustrations of the
conservatisrn, security and profit which inhere in
sagacious real estate ventures.

It is a question to be considered, how far the suc¬
cessful accumulation of wealth by these great
landed proprietors, and their descendents, whose
fainUy names are synonymous Avith, and charac¬
terize our best real estate, may have stimulated
and led on in their erratic career the bands of
speculators who from time to time have suddenly
appeared in, and as quickly disappeared from, the
real estate market. The mere fact of the immense
accumulated wealth, derived from real estate in¬
vestments, is regarded and taken into account by
speculators without their stopping to consider the
methods and principles by which those accumula¬
tions were originaUy set in motion. The specula¬
tor endeavors to accomplish in a month or a year
what has demanded, on t^e part of others, the ex¬
ercise of persistent effort, heroic self-control and
unwearying patience, extending over a period of
a quarter or half a century. Ordinary minds,
especially of the- speculative order, are apt to be
carried away and lost in admiration of great and
striking rtsults, Avithout being able to master the
prin^ples and causes preced«it to those" r^ultt

In the'jn-esent-sitaaitjod-aod Aspect^ of - tb© -ml





estate market, an honest champion is more tl.an
ever required. In kiting times of Avild specula¬
tion every man is a jirophet, aud it requires but
little discei-nment or forecast of events to mark
out the path of fortune. But iu times lUte the
present, when the very name of real estate has
become a byword and a reproach, and the owner¬
ship of any gi-eat quantity, especially if mort¬
gaged, is held to be a fatal stigma Upon mercan¬
tUe credit, the office of champion or prophet be¬
comes immensely difficult. The hour, howcA-er,
must be fast approaching Avhen prudent invest¬
ments in real estate cannot fail to be of future
benefit to circumspect investors. It is for the con¬
sideration of such that we offer the vieAvs herein
expressed.

It would be tedious and useless to attempt a
comparison betAveen the merits of real estate and
those of other investments, such as bank shares, in¬
surance stocks, railroad and mining coi-porations.
The experience of the public, Avith reference to
almost all of these, has been such of late years as
to create an impassable gulf betAveen them and
real estate. Under depreciation, real estate leaves
a residuum—securities, nothing. Tho question is
freely mooted, whether we possess in this country
a sufficiency of common honesty, and a public
sentiment sufficiently exacting, together Avith
statutory penalties, sufficiently rigorous to ensure
the faithful and successful administration of cor¬
porate trusts.

With the exiierience of the past few years star¬
ing him in the face, the man would be fresh, even
to puerility, who plants any great amount of
ready capital m current corporate schemes. Even
savings banks and hfe insurance companies, the
most sacred trusts known among men, have be¬
come infected with the spirit of fraud and pecula¬
tion, and the funds entrusted to their care have
been frittered away, or feloniously appropriated.
The Stock Exchange presents but few securities
whose quoted value stands any where near par;
while the list of insolvent and bankrupt stocks be¬
comes appalling to contemplate. The best raU-
way mortgages are held with the anticipation
amounting almost to certainty, that at no distant
day, the holders wiU have to initiate proceedings
of foreclosure, and take possession of the proper¬
ty mortgaged, as the only Avay of enforcing their
legal rights.

From all this aiTay of broken stocks and de¬
faulted trusts, we turn with comjiosure and com¬
placency to the soUd and tangible values of stand¬
ard real estate, and the sound reliable securities
based thereupon. The one supreme and distinc¬
tive merit of real estate investment is, that it ad¬
mits of personal oversight, care and manage¬
ment—^in fact, the best results attained in connec¬
tion with it, are those which follow direct, pru¬
dent personal attention.

There is no occasion to delegate authority to
others; no board of trustees or directors need in¬
tervene between a man and his property, or can
legislate away his invested fmids; no greedy
officers, ijarasltes and cormorants can eat the
oyster, and leave the sheU to the unfortunate in¬
vestor, or dupe. The ownership of property is
closely aHied with, and (}isti»ctively illustrates,
the princq)l6 of' personal sovereigaty, so highly





cherished by every American; it should be his
aim and ambition to oAvn at least his home, and
as much more as lie can pi-udently afford. There
is no Av-ay in aa-IUcIi avc cau more jiersiiicuously
iUustrate om- idea of real estate iiiA-estment, than
by referring to that great example fui-nished by
the late Mr. StcAA-art iu his Uivestment on Hemp¬
stead Plains. If we closely analyze this enter¬
prise, Ave Avill find that it conforms to all the con¬
ditions hertofore laid doAvii as determining suc¬
cessful land investment. Here Mr. SteAvart dis¬
played the rarest and mo.st sterling qualities of
tho inA-e.stor iu land—sagacity, courage and enter¬
prise, combmed Avith a maimnoth ready caintal
and a sjiirit of enlarged projection. The bare out¬
lines of this investment are, that Mr. Stewart
purchased 7,000 acres of arable virgin land, wUicU
had ncA^er known a plough.share, at the really Ioav
price of fifty dollars an acre, paying for the same
in money, and deriving all the benefits of cash
payments. A moment's reflection avUI suggest to
the lea.st experienced mind, that the ownership
of such an immense tract of land, in close conti¬
guity to, and Avithin easy accessibility of, so great
a city as New York, and purchased at such a
minimum of value, could not faU, in the lapse of
twenty, fifty, or one hundred years, to be produc¬
tive of almost incalculable wealth. When wo
take into account the rapidity with Avhich the
whole southern end of Long Island is being de¬
veloped, improved and fitted for residences, the
probable early completion of the Brooklyn Bridge
and tho erection of other bridges across the East
River, we will begin to appreciate the magnitude
of Mr, Stewart's acquisition, and tbe unerring
foresight displayed by him. When we remem¬
ber that, during the late era of land siieculation,
property far more ineligible, inaccessible and un¬
attractive, was traded in at a valuation of from
S3,000 to §(;,00() per acre, though pos.sessing no
other local improvements than those we find at
Hempstead Plains, and less prospect of reaUzing
additional ones in tlie future, Ave must admit,
in view of tho great disparity betAveen the prices
paid, that if there was no Avisdom in one case,
there must have been madness in tho other. Con¬
sider further that it was part of Mr. Stewart's
design, to erect there his own municipality, to
undertake and superintend all the necessai-y street
improvements, to furnish the suppUes of water
and iUuminating gas at the loAvest possible cost,
and it wiU be seen how wisely and comprehen¬
sively he planned. In the treatment and elabora¬
tion of such a scheme there is room for great di¬
versity of practice and opinion, but we have no
disposition here to criticize the methods or plans
by which Mr. Stewart sought to render his prop¬
erty valuable and remunerative. We are treat¬
ing now only of the initial principles of this enter¬
prise, and we aflirm, that ih their outlines they con¬
form to the soundest and wisest standards of the
business, and display the rarest and subtlest qual¬
ities of the shrewd real estate investor. On gen¬
eral principles we would declare, that the scheme
possesses traits and features which temptingly
suggest a repetition in the distant, future of the
experience of the founder of the Astor Estate in
bjis earij lAnd^vestments;
it-wiU-be m%e4 ia ao^^ to sucb aa iliustaKi-