Real  Estate   Record





AND BUILDERS' GUIDE.





Vol. XXIV.





NEW YORK, SATUEDAY, NOVEMBER I, 1879.





No. 607.





Putdutlied IVitekly by

TER3IS.

OVE YEAR., in advance.. ..SIO.OO.
Communications should be addres-sed to

C.   \V.   SWEET,

Nos. -345 AND :i47 Broadway





THE RECORD'S NEW OFFICES.

On and after this day the oflices of The Real
Estate Record will be at 135 and 137 Broadway,
corner of Cedar street.

This removal to the immediate vicinity of the
real estate market, has been nece.ssitated by a de¬
sire to accommodate our numerous friends and
subscribers, for whom The Recoud has now be¬
come an all important adjunct for tbe proper
transaction of business.

Whatever new spirit and energy may be de¬
veloped iu tho real estate and building market
will, in the future, as it has been in tho past, be care¬
fully reflected in these columns, and in its new
quarters e.'jpeciaUy it will continue to be a faithful
Record and safe Guide to all those interested in
real property, whether located in New York or in
any part of tbe United States.

IN WHAT SHALL WE I>n*EST.
As nearly everybody in legitimate business is
making monej', tbe (piestion comes up in a thou
sjind ways as to wliut are the most desirable in-
vestment.s. Of cour.so, all conservative capital¬
ists will ans%vf?r that high interest means poor
security, aud that government bonds and lirst
mortgages on real estsite are tho only i^rudent in¬
vestments for those who wish to be sure of a re¬
turn upon tho money invested. Next after gov¬
ernments and first mortgages, the conservative
capitalist will say, come good railway bonds
and the stock of roads which now command high
figures, such as the New York Central, the Chi¬
cago & Rock Island, the Chicago, Burlington &
Quincy, aud the like. Of cour.se, nothing that
could be said here would alter the opinions of the
great mass of conservative investors. They loill
continue to buy high priced securities which pay
sniall dividends. And yet the experience of the
past seven years has not been such as to conlirm
their views. Investors in governments have lost
money from 1S76 down to the present time; that
is, the market price of the national securities
have steadily declined in value. The most serious
losses of the National Banks were in their govern¬
ments. Now the investors in the better
class of railway stocks have done much better,
because these have risen in value; but we warn
those who have money whieh thej' wish to em¬
ploy profitably, to beware of the current notions
as to what are the best railway properties in the
country. On the return of national prosperity, the
great rich railway companies have entered upon
a career of leasing and extending their lines; of





charging themselves with tho complications of
minor connecting roads iu a way that will finally
strip them of all the advantages wluch thej' now
have over the so-called fancy securities. Take
the case of the New York Central. For pruden¬
tial reasons, the Vanderbilts do not think it wise
to increase the business of their great road. They
could easily add to their profits four-fold, for it (s
demonstrable that the eight tracks of the Central
road could take all the pas.sengers and all the
freight which now comes to the seaboard by all
the other trunk lines. In other words, the full
capacity of this road would be competent to do
all the bu.sine.ss of the Baltimoie Sc Ohio, the
Penn.sylvania and the Erie loads. Naj-, more, it
could render the Erie Canal ureless in the carrj-
ing of heavj' freight. But the Vanderbilts do
not want to ruin the other roads, as it would
bring competitors in the field who would carry
freight and passengere at verj' low rates. The
Central does not care tojncrease its earning ca¬
pacitj', iiecause it does not know what to do with
the money. A ten per cent, dividend would cre¬
ate a h().st of enemie.^, and the crj' against high
freights and monopolies might create awkward
complications, and lead to legislative restrictions
that would put the railroads practicallj' under
the control of the State. But the Vanderbilts
are eager to make more money. Instead of doing
an immense business and reducing the lolls, com¬
binations are entered into to nmke a i)rofit out of
other and competing road.s. Hence, the rise in
Ihe stocks of the Lake Shore and Erie Railroads.
The Vanderbilts will get their extra dividends bj'
the purchase and practical leasing of the Lake
Shore road and the control of the Erie road. Bj-
their connections. West, Southwest and North¬
west, the vast seaboard freight business of the
Luke Shore will bo run over the Erie road, so as
to raise the price of the securities of that prop¬
ertj'—a majoritj- of the shares of which are al¬
ready in the hands of the Vanderbilts. In other
words, there is a practicable consolidation of the
Central road with the baidcrupt Erie road and
the debt encumbered Lake Shore, and to make
the matter still worse, a lot of bankrupt connect¬
ing roads, extending to all .sections of thejcoun-
try, are being bought up to form part of the
great combination.

Then take the Rock Island road. Tho stock of
this company has ruled very high, and it has
been paying for some time past ten per cent,
dividends; but now we find it leasing a number
of connecting and heretofore worthless roads.
The Cedar Rapids & Burlington for one, the Des
aioines & Keokuk for another. Then the Pekin,
Peoria & Warsaw, a road, the securities of which
were considered worthless a j-ear since, has also
been practiaiUy secured by tho Rock Island, so as
to head ofT possible competition on the part of the
Chicago, Burlington & Quincy. The result will
be that while the roads thus leased, or purchased,
or guaranteed by tho Rock Island road will be
very greatly enhanced, in value, the Rock Island
securities, proper, will be worth far loss than they
have been in the past, and ifc is safe to predict
that this stock which is now held at 150 will, iu a
few years time, be worth less than par. The
Chicago, Burlington & Quincy road, the stock of
which has ruled very high, is owned principally
in Boston, and is undergoing the same transform¬





ation. It has been trying to lease the Missouri,
Kansas & Texas road, but may bo outbid by the
Union Pacific and Wabash combination. But
every now and then, it will be noticed, there
appears in the Wall street news the statement of
some new properties \vhich the Chicago, Burling¬
ton & Quincj' is trj'ing to secure.

The Wabash combination is another case in
point. This may connect with some ot the bank¬
rupt Canada roads and the securities of the old
Midland road, the bonds of which were down to
four cents on the dollar a conple of j-ears since,
are now selling in the neighborhood of thirty,
upon the supposition that they will be bought up
bj' some great combination which wants an out¬
let to the ocean. In short, the railwaj' sj-stem of
the countrj- is being rapidlj- unified. The great
and prosperous companies are buying up and
controlling the cheaper and what have been
deemed the more worthless railway properties.
In other words, the solvent concerns are forming
partiiershiDS with the insolvent concerns to the
great advantage of the latter, and particularly
to the emolument of the ollicers, promoters and
manipulators of the leading trunk lines of tho
countrj-. It has been remarked in the press that
the fools are making all the monej- in this recent
rise of stocks, while the wise n;en have so far
made none. In other words, the pnulent,
cautiou.s, capitalist who has plumed himself upon
his conservatism in declining to deal in " wild
cats "—in such securities as Iron Mountain,
Missouri, Kansas & Texas. Hannibal & St. Jo,
Erie, and the various stocks and bonds which
have been selling all the waj- from two to ten
cents on the dollar, has found, to his amazement,
that the reckless, foolish, hopeful speculator who
luis dealt exciusivelj- in " wild cats " has made
inunense sums of money, while he has nmde
nothing .at all. Nor is this the whole of the storj-.
The re.<pectable properties in which he has in¬
vested his hard-earned monej- are saddled with the
cost of running and j,'iving value to the Western
securities he has looked upon with contempt and
has called hard names. In other words, prudence,
foresight and caution have been at a discount iu
Wall street for the last few months, while reck¬
less hopefulness and a willingness to take " big "
risks for the sake of " big" profits, have led to tho
accunuilation of vast fortunes.

We warn conservative capitalists uot to hold
high priced securities. They maj- go still higher,
under the inlluence of the increase in the currencj',
and the impetus given to business by better times,
but nothing is surer in the future than that there
is to be an equalization of values in railwaj'secur¬
ities, due to the combinations which are inevit¬
able between the high priced and the low priced,
within the next five years. This is a matter of a
great deal of importance, and we advise our
friends, who are thinking about investing, to
carefully scan the stock lists and to avoid any
particularly high priced security. There is really
more money in the cheaper railways which have
a chance of being connected with any of tho
trunk lines than there is in the trunk lines them¬
selves. Our own advice is to invest in lands and
houses in the city of New York, or vicinitj-.
Nothing can prevent the growth of this great
metropolis, and by that term we include not only
New York island but north of the Harlem River,