EAL  Estate   Record





AND BUILDERS^ GUIDE.





YoL. XXY.





NEW YORK, SATURDAY, MARCH 6, 1880.





No. 625





Published Weekly by

TERMS.
OWE YEAR, in advance... .SIO.OO.

Oommuuications should be addressed to

C.   W.   SAVBJET,

Nos. 11,5 AND 137 Broaoawt.





INVESTMENTS IN REAL ESTATE.

There are a few notable characteristics in the
recent movements in the real estate market, the
chief of which is the proportionately smallaniount
of capital going into these investments. Take the
West Side, which is a favorite field, all the money
which has gone into investments there in the
last year would not aggregate over two million
dollars. Contrast this with the movements of
capital in Wall street; it does not exceed many
a single operation of daily occurrence. The
result is that there has not j-et been enough
money put in the real estate market to move it
more than one section at a time. If the time
should come that any respectable amount, say flve
inillionF, is employed there in purchases, the effect,
as every real estate dealer s-ees, would be sur¬
prising. Real estate used to be the great field for
investment and speculalive enterprises. Now it
is compar-atively one of tho smallest. Govern¬
ment securities take up the money held for
investments by the hundreds and thousands of
millions. If this money were released, or if
there were no such securities, millions would be
expended in improvements and building on prop¬
erty. Hundreds of Nevv York capitalists would
do what Edward Clark is now doing alone. If
there comes the feeling that a row of buildings
or a large apartment hou:e, is a safe and
profitable investment, and Mr. Clark is now
proving this, the transfer of a few millions from
four per cents into real estate would make a
boom that would start theniarket into an extra¬
ordinary activity.

Iu the present peculiar state of the marKet
with not enough money moving to keep all parts
of the field active at ^the same time, the phases
are very interesting. Take one illustration;
street lots between Fifth and Madison avenues,
aud from Sixtieth to Seventieth street, will sell
at §35,000 to a builder who will erect a house on
it, and sell it at a profit. This establishes that
value for the lot, as actual and productive and
not a speculative value. Taking this as a start¬
ing point, the scale of values, according to just
gradations, shows tbat lots on that part of Fifth
avenue are worth $.50,000.

Eighth avenue, with its finer and higher grade,
and unobstructed views over the park, and,
being a few years behind in point of occupation,
will be worth about half of the Fifth avenue.
The Boulevard, if the surf ace railroad is extended
through ifc as promised, will be worth a propor¬
tion, say three quarters of what the Eighth
avenue is worth; and Riverside, which a year
ago was worth nothing ^to^ speak of, with its
magnificent river views, the beauty of which few





have any conception, will be worth as much as
the Eighth avenue, or, as some people think,
worth ra ore than the Fifth. If there was a full
flow of money into investments of this character,
prices would be 'pretty well sustained in these
different divisions of the fleld. As ifc is, the tide
of value is approaching these graded levels with
irregular and fitful moveraents, and the fitten
tion of buyers is attracted to only one line at a
time; the different divisions are taken up and
advanced in turn. If the profitable employment
of money should attract a large amount of
capital, and particularly if improvements should
goon, the phases of theniarket might change in
a dav.





A QUIET LOOK AHEAD.

Last week we reviewed the situation in the
general business of the country in a somewhat
hopeful spirit, bufc perhaps ifc would be well to
poinfc ont some possible dangers which cautious
business men should constantly keep in mind.
VVe are living in "bull" times, when prices are
advancing and all the evidences of wealth are in¬
creasing in market value. Hence everyone is
di:posed to be jubilant and perhaps incautious;
for steady, old fashioned business men have noticed
that in the race for wealth it is the rash and
adventurous who have made the most money
during the past year and a half. We ourselves
have no serious apprehensions for the next few
years, and yet there will be certain minor
disasters against which we wish to call the at¬
tention of the business community.

First, in importance, is the condition of our
currency. We have repeatedly pointed oufc in
these columns the danger which has come upon
us from the addition of all the gold and silver of
the country to our greenback and bank circulation
without any attempted reduction in the volume
of paper. Our gold and silver practically did nofc
count before resumption. Since then we have
added at least three hundred million of gold and
silver to the available currency of the country.
Ifc is the experience of history that all such
additions to the currency, whether it be gold or
silver, or paper, have a tendency to swell prices.
Voltaire, the famous French philosopher and
writer, was asked how he became rich. "Oh,"
he said, "I have a friend among the directors of
the Bauk of France. When the bank is about to
issue currency he lets me know and I buy; when
the currency is to be contracted I sell." And this
is the secret of a great deal of the money making
of the day. The keys of the financial situation
are nofc held so much by the great stock
speculators as by the inside money lenders
and those who are familiar with the secrets of
the Treasury Department, and the banks and
capitalists who lend money have an advantage
over all other operators. The outside public
playing against these greafc money kings in the
end surely lose the game, "for the dice are
loaded and the cards are stacked." Ifc is the great
bankers who are absorbing the money of the
world.

The danger lies just here. Resumption was all
righfc, so long as our exports lai-gely exceeded our
imports and gold came pouring into the country.
This has kept prices rushing up, and wiU continue





to keep them advancing until such time as our
imports begin to exceed our exports. Already
our importation of gold and silver has ceased and
our exportation has commenced. Since the Isfc
of January over a million dollars has left this
porfc for Europe, and by May it will be found that
a steady drain of the precious metals will be
leaving our coast. We should have tried to re¬
tain our bullion by putting behind every green¬
back an honest dollar of gold or silver. In place
of one, two five and ten dollar bills, we ought
to-day to be circulating gold and silver. In other
words, we ought to have made every possible use
of bullion in our own counti-y. But the present
is a Greenback Congress and would not listen to
anything that favored contraction, while the
business men were so absorbingly employed in
making money thafc a reform in the currency did
not interest them. Hence we are going ahead
recklessly with our top-heavy currency, and some¬
time within the coming two years there will be
a crash. When the drain of gold becomes so
great that an alarm is created, there will
be a rush upon the Treasury for a liquida¬
tion of the greenbacks; gold will disappear
from circulation and be quoted afc a premium,
and then look out for a terrific break in
prices. It will bo temporary of course. The
prosperity of the country will continue, bufc
people who hold high priced stocks or goods on
margins will suffer severely. The speculative
element will be sharply punished. Wise action
by Congress would anticipate this trouble and
avoid it, but Congress is not wise, and the busi¬
ness men of the country do nofc appreciate and do
not care for whafc will happen in a couple of
years from now. Here, then, is the first peril in
the future, namely, the suspension of specie pay¬
ments by the government upon an excessive
demand for gold for greenbacks. Secretary
Sherman evidently anticipated some such trouble
for he insists that Congress shall leave him his
power to pay oufc greenbacks instead of gold
upon demand.

Our second danger is unprofitable investments.
The country is so hopeful, people ai*e so eager to
make money, there having been a margin of
profit on everythmg dealt in since 1877, that the
adventurous and sanguine are looking around for
new investments. So long as they confine them¬
selves to the legitimate business of the country, no
harm will come of it. But there are many
mining adventures and railroad enterprises
which are certain to be unprofitable. The city is
swarming with people from the Pacific coast
with mining schemes, and some of our mosfc con¬
servative operators and bankers are catching the
fever. The fall in Little Pittsburg foreshadows
what may happen lo a number of equally
promising stocks. We now recall the petroleum
mania and its disastrous issue, bufc the losses in
thafc business will be as nothing compared with
what may come through unwise investments in
mining shares. We have nothing to say against the
business. It is one of the mosfc promising indus¬
tries of the country, bufc somehow stock opera¬
tions in connection with mining matters have
usually resulted disastrously. Ifc is inevitable
that after a time dividend paying mines will be
discredited, and the dealing in mining stocks .\vill
be regarded as mere gambles.   For years past,