August IS, isSl





Record   and   Guide.





207







De/oteO to Re^L Estme . BuiLDif/o Af^crfiTECToi^E .Household DEGOf^noil.
Bi/sii/ESS a(Jd Theme? of GejJeivL 1^t£i\est

PRICE, PER YEAR IIV ADVANCE, SIX DOLLARS.

Published every Saturday.
fELErHONE       ....      Cortlandt 1370,
Communications should be addressed to

C. W. SWEET, 14 & i6 Vesey St.

J. 7. LINDSEY, Business Manager.





Vol. XLVIII





AUGUST  15, 1891.





No. 1,222





The publication offices of The Record and Guide have been
removed to Nos. 14 and 16 Vesey street, over The Mechanics' and
Traders' Exchange, a few feet west of Broadway.

Reader.'! of The Record and Guide may subscribe to the new
illustrated quarterly. The Architectural Record, by sending
their names and addresses to tlie offices of pubUcation, Nos. 14 to
16 Vesey street.   Annual subscription, $1.00.

THE advance in, and subsequent stability of, the Grangers is
affecting the whole stock list, and it seems as if the corner
has been turned for a good long bull movement. Issues whose de¬
fects can not be offset by grain carriage or tlie prospect thereof,
appear to have discounted their demerits for the time being, at least,
and it would not be surprising if the advance became general. North¬
ern Pacific, which surprised its friends by lagging when other grain
carriers were moving up, took a jump, and Union Paciflc began to
recover its losses yesterday. Reports of earnings on the North and
Southwestern roads are showing substantial increases, which will
also swell the incomes of the Eastern trunk lines. There may be
set-backs from causes too often alluded to here to need mention
now, but it must be admitted that the outlook has the most satis¬
factory aspect for an increase in stock values. The recent advance
in the Grangers lias been too well maintained, and the solid bene¬
fits of the crops are too near at hand to allow of any other con¬
clusion.





ONE of the most marked indications of the way in which many
British investments have suffered since the Baring failure is
afforded by the position of the finance and trust companies.
Nothing exactly similar to these companies exists in this country.
They have been founded ostensibly for the purpose of securing to
small investors the advantages commanded by large capital and
wide knowledge in the remunerative employment of money; that
is, their bonds and stock would be sold into comparatively small
holders, and the money thus received would be employed in the
way that seemed most advantageous to the directors. For the first
two or three years of their existence—during the speculation of
1889 and 1890—they were remarkably successful and distributed
large profits to tbeir shareholders ; but their managers either could
not or did not forsee the prospective collapse, and when it
came they, were loaded up with issues of dubious value, which could
bo sold only at a heavy loss. It was owing largely to the purchases
of these trust companies that London Stock Exchange quotations
were raised to such an extravagant level a few years ago. These
facts are well known, and investors have consequently been selling
their trust company shares with their usual haste and indiscrimina¬
tion. A list has recently been published of the highest prices
recorded for the shares of twenty-nine of these companies com¬
pared with the present quotations. The list shows declines amount¬
ing in some cases to 60 per cent and in many to more than 30 per
cent. The general fall in the value of securities would account for
some portion of this shrinkage, but there are other and more
special influences at work. The trusts were mainly creatures ofthe
recent speculation; they went largely into the underwriting and pro¬
moting business, and they still retain the mass of securities they
thus accumulated. Their managers have naturally been subject
to much severe criticism, which no doubt has been largely
deserved. The chief cause for the present position of the trust
companies is the vicious system of founders' shares, which made
the managers of these concerns eager to distribute extravagant
dividends, for they were thus given the opportunity of securing
the return of capital originally invested in their founders' shares sev¬
eral times over in one year. It by no means follows from all this that
these flnance companies have not a perfectly legitimate place. As
in all such enterprises the security of the investor rests ultimately
on the honesty and ability of the directors or manager, for there





is no doubt that a shrewd man with ampls capital can invest money
to better advantage than can ignorant people of small means. It
should be remembered that if the inflation and consequently the
collapse was caused largely by the trust companies, that other
inflations, with far less substance to them, have the product of
incautious lack of knowledge, united With a little spare money.





WE print in another column a review of the foreclosure sales
held since the beginning of this year. It deserves the serious
attention of everyone interested in real estate—of fiduciary institu¬
tions, capitalists, building material merchants and others. The
review discloses a condition of affairs very far from satisfactory—a
condition, moreover, which is of rather long standing, for our
investigations last year showed that an exactly similar state of
affairs existed. Why is it that this year more than 20 per cent of
all the parcels offered tmder foreclosure failed to sell for an amoimt
equal to the charges upon them? In answering this question there
is of course a strong temptation to search for causes outside of the
real estate field, and having found some, to magnify them and
insist that they are completely explanatory. There can be, of
course, no doubt that the strained and unsettled state of the money
market during the past year has caused not a little of the unsatis¬
factory condition of the real estate market. It has not, howeviT, been
the real cause, but only—if the phrase may be used—the dinclosing
cause, the accidental circumstance which revealed what already
existed. The foreclosure suits last year, when there was no special
tightness of money,'were unsuccessful, just as they have been this
year, so that it is apparent that we must get beyond the monetary
troubles of last Fall.





IN the first place, it seems to us that too large a part of the new
building is done under such financial conditions that nothing
but the best of luck and the most prosperous of times will enable
all parlieb to pull through successfully. Very mildly adverse cir¬
cumstances are sufficient to knock the fictitious element out of the
operations. In many of the foreclosure sales we see
what this fictitious element amounts to, for it does not follow
that because a piece of property does not bring the charges
against it that we are to conclude that the market is
weak or values have tumbled. Quite apart, however, from
the keying up of prices due to the speculative system of building,
there is no doubt that in certain sections of the city real estate has
been held at pretty high figures, not too high, perhaps, if the future
be taken into consideration; but it is hard to realize on the future
in dull times. Some of the property mortgaged has had a good
deal of the "future" in it, and this tlie foreclosure suits have
readily eliminated. Another fact has to be pointed out, of which
we speak in our review, it is that property is not always sold under
foreclosure proceedings in a manner that insures the best market
price of the moment.





THE Rev. Mr, Stiggins, when asked what tap he preferred,
replied that all tap was mere vanity. Mr. Weiler, as we
remember it, admitted the truth of this, but pressed the reverend
gentleman for some statement as to which of these vanities was
least vain. And Mr. Stiggins confessed that he thought some rum,
with hot water; and sugar, partook less than any other drink of the
nature of the devil. In a similar spirit, we may say that experience
has proved the vanity of placing too much reliance on newspaper
anticipations of the reports of the Rapid Transit Commission, but
that under the present circumstances there appears to be a certain
amount of information circulating which is less vain than much of
the same kind. This information is to the effect that the Com¬
missioners have abandoned any system of deep
tunnels, and, whatever else they do, will run
their cut as near the surface as possible. So much, indeed,
they have already declared in their report; but nobody paid much
attention to it, because of the varying conceptions which exist
regarding the limits of the possible in this matter. According to
our authority, the limit which the Rapid Ti-ansit Commissioners
put upon tbeir ability to approach the surface of the street with
their tracks is scarcely any limit at all, and that the Commissioners
are practically hesitating between two plans, both of which pro¬
vide for tunnels very near the surface. This may or may not be
the whole truth; but it is worth while to consider what
the consequences will be in case it is the whole truth.
Broadway has been the chosen land and the summuni bonum
of all rapid transit schemers since New York first began
to grow along the line of that thoroughfare ; and the danger
to which the street has always been subjected has tended
to make property-owners most suspicious of any attempt to gain
possession of the street. They have fought to the bitter end every
scheme which seemed but ever so little to threaten the security of
their property, and have killed at least one plan which would have
made that street unique and most efficient for its purpose. The
question arises : Will they pursue the same policy in reference to
some similar plan of construction, if this were proposed by the