November 28,1891





Record   and   Guide.





683







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g^                 ^             EblABUSHtU ^J/ /I

De/otEO to f\EikL Estwe . Building AFicrfiTEtrroi^E ,HouseHold DegoratioiI.
Bi/sii/Ess AfJD Theme? of GeSera^- IjJtci^est

PRICE, PER YEAR I!V ADVANCE, SIX DOLLARS.

Published every Saturday.
Telephone       .      -      .      .      Cortlandt 1370.
Communications should be addressed to

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

J. 2. LINDSEY, Business Manager.





Vol. XLVIII





NOVEMBER  28,  1891.





No. 1,237





TTIE conditions determining the movement of prices in Wall
Street have not varied to any extent during the past week;
consequently \ alues have remained about constant. There has,
indeed, been a perceptible easing up in the money market; for cur¬
rency is beginning to return from the West. With a continuation
of the present very heavy exports of wheat and other products we
may expect during the early months of the coming year an excep¬
tionally low rate for money—a state of things which ought to give
to the bond market its long-expected rise. Then, too, the foreign
situation is far less threatening than it was. Financiers in all the
large European cities seem to be gaining confidence; and while
they are not likely to buy our stocks largely, while so many
of their own good investment securities are selling cheaply, ttill
their troubles will for the present cease to menace our market.
These better conditions have not, however, had any very
material e£fect on prices. The probable reason that the excellent
prospects are not immediately discounted to a larger extent is that
an indisposition to advance prices is always felt just around the
beginning of a Congressional session; and this year is not
liable to prove an exception to the general rule. Further¬
more there are some undeniably weak spots in the situa¬
tion. The South is still to such a large extent dependent on cotton
for prosperity that the prevailing low price which that
product brings will keep that large section of the
country depressed for some time to come. This tact, however, is
not of any general significance. It remains true that the year 1891
closes with the financial outlook far brighter than were the pros¬
pects at the end of 1889 or 1890. A little earlier than this last year
the Baring crisis tried men's pockets, while the December of 1889
was troubled by rumors of rate wars and like financial disasters.
Now, however, our troubles are either local or rather impalpable.
For the last ten years eminent financiers have been nervous about
Congress' action respecting silver. All these fears have proved
groundless hitherto, and this year also they are not likely con¬
tinuously to affect prices adversely.





A HOPEFUL sign which may be fairly claimed as the flrst
result of the protest against the secret use of the Lake Erie
& Western Railroad stockholders' proxies is the statement in the
Sun of Thursday that " a resolution was passed (by the Board of
Directors of the Richmond Terminal Company) stating definitely to
what purpose the proxies should be put, which Mr. Inman is
authorized to solicit and vote at the annual meeting on December
Sth." This is precisely as it should be. Trustees ought never to ask
for a proxy, which is but a power of attorney from their cestuis qui
trust, without stating explicitly for what purpose the proxies are to
be used. If The Record and Guide has in any measure contrib¬
uted to the alteration of these loose methods it
will consider itself amply repaid for all the space
given to this matter. A collateral result of tbis neglect to do this
is as follows: If the stockholders of the Lake Erie & Western
Railroad had been clearly informed in advance that it was proposed
to use their proxies in June, 1890, to put a second mortgage on the
property, they would have been able to see to it that the resolutions
authorizing such action embodied in their terms every condition
and restriction which was necessary as a safeguard for the proper
marketing of the securities and the expenditure of the money real¬
ized. As it is no stockholder has any means of knowiug what the
securities- are going to bring, nor precisely what the company is
going to get back in the way of assets in exchange
for them. All the stockholders do know is that
if the extraordinary and outrageous action of their
trustees cau stand unquestioned, they will be left only to
the tender mercies of Mr. Brice for such return as they may
eventually get. What the mercies of Mr. Brice are likely to be
stockholders can perhaps infer from general repute and from such
knawledge .as they may  possess of the fate of other properties





which have fallen into his hands. It might not be amiss just at
this juncture to point with warning finger to the fate of the Rich¬
mond Terminal property as illustrative of what stockholders in the
Lake.Erie & Western Company may expect if at this juncture
they fail to assert their rights and protect themselves against this
way of doing business.





Eapid Transit PosEibilities.

PENDING the result of the canvass of Broadway property-
owners, which is now being vigorously undertaken, discus¬
sion respecting the prospects, merits and dangers of the Commis¬
sion's plan has almost entirely ceased. The Commonwealth Club
have indeed been considering their old oft-pondered problem, but
the discussion was edifying, not so muoh because of the light which
it threw upon the plan of the Commission as because of the
effectual manner in which it refuted the claim of the enemies of
the Manhattan Company that the intelligent public opiuion of the
city is opposed to granting to that corporation any extension or
enlargement of its present system. But the opinions of the speakers
at the Commonwealth Club have not brought forth any comment
by the newspapers, which are waiting for the Commission to go on
with its work—if it can.

Very possibly this silence will be succeeded by a storm. The
Commission's plan was received with ill-concealed hostility by cer¬
tain of the papers and we may be sure that this hostility was
exhausted in the trivial criticisms which constituted the whole of
its ostensible justification. Apart, however, from the more or less
powerful enmity of this character which the plan has encountered
and will encounter, there are several obstacles of a more serious
character, the existence of which is known, but the resist¬
ance of which still remains dubious. In the first place, delays
may take placf in satisfying legal requirements. Probably a num¬
ber of Broadway property-owners will give their consent to the
plan sufficient to make an appeal to the Supreme Court unneces¬
sary ; but this is by no means certain, several of the largest owners
having expressed themselves as opposed to any tunnel near the
surface. Consequently no one can tell when the Commissioners
will be in a position to offer the franchise for sale. Equally uncer¬
tain is the prospect of selling the franchise to advantage. It is
necessary that any company operating should put on a service
of unusual speed and convenience, for it will be an indispensable
element in the work to be performed by the new system that t
should be efficient enough to overcome the advantage which
Brooklyn possesses over the upper wards of this city in respect to
contiguity to the business districts. The Rapid Transit Commis¬
sioners will then have to insist oa a service of this character, and
yet at tbe same time will scarcely wish to sell a franchise of such
great ultimate value upon very unfavorable terms.

The difficulties attending such a sale have been repeatedly pointed
out by The Record and Guide. The system will be especially
designed to meet the needs of the least remunerative class of
traffic ; it will have to give its patrons unusual comforts and con¬
veniences, and even if capital sees money in the project, in spite of
these mitigating circumstances it will have to be constructed
at a time when the best classes of bonds are diffl¬
cult of sale. We are not trying to estimate the
resistance of these obstacles, neither are we trying to predict
the outcome; but one important question arising from the possibility
that tLese obstacles will prove insuperable needs asking and
answering. If the Commissioners find it impossible to satisfy legal
requirements with their plan, they will have no alternative but to
relieve the almost intolerable inadequacy of the present service by
giving to the Manhattan Company, so far as lies within their power,
authority to improve its service. But what if the Commission finds
that the franchise cannot be sold, or that it can be sold only on
such terms as will make the contract a very bad bargain for the
city ? This question may have to be faced, and it is well to search
for an alternative. Doubtless, any corporation that bids will
believe that it has the municipality in a tight place, and if possible
it will squeeze concessions out of the commissioners, which would
place our authorities at a great disadvantage in all its subsequent
dealings with the corporation, and would fasten on the transit ser¬
vice of New York another railroad as insatiate and unmanageable
as the Manhattan Company.

That this is scarcely a desirable consummation every one will
admit; but what are we going to do about it ? The plan might be
altered, buc it could be altered only by decreasing the efficiency of
the system, and that is, from the necessity of the case, excluded.
The logic of events seems to be drawing om- authorities to consider
seriously whether the city should not be placed, by legislation, in
a position to build the system for itself. New York can issue bonds
for more than $-15,000,000 before its borrowing power under the
constitutional limitation will be exhausted, so that there are uo
obstacles in that direction. The system could be built far more
cheaply by the municipality than by a private corporation ; for
New York could borrow at 3 per cent, while a private corporation
. ..would have, to .pay at least 6 per cent....If. the .8.y.stem should cost