Janaary 14,1898





Record  and   Guide.





85









ESTXBUSHED ^^N^ARCH 21*^^ 185ft. ^
fipbltO TO RfA^ ESTWE , SuiLDlf/o A;B,CrilTECIdI^ .HoUSClJOUl DeOOR^TWiC

PRICE, PER TEAR IN AOTAIVCE, SIX nOLLARS.

Published every Saturday.
ThlephombI      ....      Cortlandt 1370.
OonuQTiDlcatlonB should be adilreseed to

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

J, 7, LINDSEY, Bimness Manager,

"Entered at the Post-ogtce at New Ywk, N. Y., as second-olasx matter."





Vol. LI.





JANUARY 14.  1898,





NO. 1,391





THERE haa been p;ood buying in tbe atock market in the past
week, wfiich augura well for prices in the near future, though
it cannot be eaid that the advance of an industrial specialty in a
few hours more than can be seen in a good raih'oad stock in as many
weeks, or that rush on the Exchange and quiet in the commiaajon
houses are the best ground-work for a bull movement. Manhattan
has been thu leader, and its advance has been made permissible by
the large withdrawals of stock from the market through recent
inveatment purcbasea. The price is now much higher than it was in
1887, and the thought arises whether it has not discounted for the
time being all the benefits that can accrue to tbe stock, even
though the Manhattan Company is the only organization
n the field capable of aupplying this immense population
with rapid transit facilities, aud whether buyers at this
stage may not be fooled aa were the, buyers of Reading in the
sixties. It may be said that the cases are not the same, which would
be true, but it cannot be denied that the tactics of the manipulators
are the same, or that tbe temptation to create a reaction m tbe
speculative mind is proportion to the size of an advance. Tbe real
event of the week and the one that baa brought iu moat of the
business from tbe outside waa tbe withdrawal by the Bank of
France of its special terms for gold and the consequent failure of
the exporting houses to ship any. This shows clearly that if the
currency trouble could be removed there would be a rapid appre¬
ciation in the value of aecurities especially as money is piling up in
the banks under the flow from the interior.





LONDON brokers have been complaining of dullness in the stock
market throughout tbe past year; and the complaint is uot
without foundation—particularly as regards speculative business.
The volume of investment business proper has been by no means
small. Ir fact it appear.s to have been enhanced by this very cur¬
tailment of speculative dealing. The effects of the shock which
credit received in the latter part of Ifi90 are still distinctly
traceable, being tbe more jirolonged because they were not
allowed to work themselves out naturally at the time, and now, on
looking back over 1892, one sees plainly enough that people
have been cautious, sometimes to tbe verge of nervous¬
ness throughout the whole year, aud that their capital,
removed from South American securities and the kindred concerns,
such as trust companies, which were involved in tbe vortex of the
Baring collapse, and removed even from classes of securities which,
although not connected with South America, are still of a more or
less speculative nature, has sought safer channels in securities of a
sound description. The general business of the United Kingdom
does not present the same encouraging features which the share
market did. Exports have steadily declined, the home demand fell
off and not until tbe very close of the year did any signs of a revival
show itself. Tbe English iron and ateel tradps during 1R92 have
fared even worse than they did during 18!l . The features
of these industries have been a continuous tall of selling jirices, a
large reduction of output, due partly to tbe lessened demand from
outside sources, and partly to the accidental circumstancea. such
asthe great atrike of the minera in Durham, which compelled a
suspension of productive operations—a generally keener competition
on the part of continental countries, an almost complete collapse of
the demand for railway iron, and a high coat of production relative
to the reahzed selling prices. Nearly all these conditions have in a
measure been duplicated in other induatriea. In Paris, notwith¬
standing the drop in securities since tbe explosion
of the Panama scandal, the year of 1893 was not
generally unfavorable to prices, with, however, some
notable exceptions, adversely influenced by special circum¬
stances. French 3 per cents which, after gaining seven points in
1890, had remained stationary in ISol, beginning and ending tbe





year at about 95, touched par more than once in the last quarter of
lt-9!i, and still show a gain in spite of the recent reaction. In tbe
commercial world the event of the year was the application of the
new customs tariff. So far its effects have been disappointing.
The increased revenue from duties has been only partly realized,
and the measure has encountered a resistance in foreign countries
for whichthe protectionist promoters of the tariff were not prepared.





THE ealH of the franchises of the new street railways on 9th
avenue and Lexington avenue are another illustration of tbe
reckless way in which the city's property is still disposed of. In
the first place the terms of the sale were such that the only possible
competitor was the Broadway syndicate or some company con¬
trolled by it. No one, however, can blame the local authorities for
making these stipulations, because tbe Broadway syndicate is in a
position to give a better service to tbe public than is any other cor¬
poration. But this fact does not make the sale any less farcical.
In both caaes it waa stipulated that ultimately the pur-
chaaera of the franchiae should pay to the city 5
per cent of the gross receipts of the road; and
in both cases a mock competition took place, invented, doubt¬
less, to give tbe purchasers a better title, which resulted in the
city's obtaining a quarter of 1 per cent more than 5 per cent.
Why, may we ask, was the percentage of the city placed at auch a
figiu'e ? What reason had the Comptroller to suppose that the fran-
cliise was worth juat f* per cent ?    Why this discrimination against

4 or 6 per cent? There ia a story extant about a broker who sat
down in a barber's chair in a very absent frame of mind to have his
hair cut.    "How much shall I take off':"' aaked the barber,    " Ob 1

5 per cent I suppose," answered the broker, abstractedly. One might
almost suppose that a'aimilar prejudice in favor of that figure exists
in the minds of corporation lawyers andfcity officials. Companies
wanting franchises are always expected to pay 5 or, perhaps, 3 per
cent for a privilege. Nobody ever asks what the real value of tbe
franchiae is, or how much tbat value may be expected to increase
as the city increases in population. The Pythagoreans used to
believe that certain numbers possessed a mysterious potency; and
it would aeem as if their traditions were still alive in New York
City during the month of January, 1893. Asa malter of fact,
however, this superstitious reverence of 5 per cent ia not inexplic¬
able as it aeeoia. In truth, nobody knows what these franchises
are worth. Their value varies enormously according to the length
of time iu which they are operated. Our city officials, knowing
nothing of the value of the property which they are selling, put
down in the contract the first glib percentage that suggests itself.
Let us hope that some lime they will cease arbitrarily to " take off
5 per cent." The only way in which the city can get value in full
for such privileges, or anything near ic, is to keep the franchises in
its own possession. Our street railways serve the same function
as our streets; and they ahould as Uttle be allowed to pass into
private hands.

WHILE fear of intrusting the expenditure of so muob money
to Tammany is the ostensible basis of the opposilion to the
construction <if the underground road by tbe municipality, yet the
deeper grounds of opposition are, we believe, Homething very dif¬
ferent. The trouhle is two-fold. In the first plac3 people do not
fully appreciate tbe extreme importance to the city of the imme¬
diate building of a pe.)-maneiit■ system ; and in the second place
they are not sufficiently accuatomed to the, municipal conduct of
such undertakings. If, instead of a rapid transit system, we were
now concerned with the planning and the building of a new aque¬
duct, the newspapers could not with any ilegree of plausibility
make tbe possession of the city governnipnt by Tammany a ground
for the indeflnilf postponement of the improvement; they could do
no moie than insist that the work should be placed in the hands of
an expert commission. It would be generally recognized tbat the
aqueduct was necessary and must somehow be budt by the city.
But hitherto city transit has been surrendered to private corpora¬
tions ; it is not associated in people's minds with the paoae kind of
public necessity as an aqueduct is. Whatevt'r the outcome of the
present discussion, it will at least have the advantage of jjopulariz-
ing the idea of nuinicipal ownership of these nalural monopolies;
and when a similar crisis ari,ses it will make the adoption of
the wiser course ail tbe easier. For if anybody suppose tbat New
York and other large cities can escape probleuiB of this kind ihey
are very much mistaken. These problems are the necessary out¬
growths of municipal development. As tbe profits of private
corporations operating local franchises become larger, the public
protests against this form of monopolistic stealing will become
louder; and people will begin tn appreciate yet more clearly that
the only way the city can get value in full for such privileges is by
kpeping them in the hanfls of the municipality. At present the
public interests involved are not understood. They never will be
understood until the city owns everything in or on top of the
streets. In our opinion this will in the end be the way to stop
municipal misgovern ment. The city's interest will then be too
important to be given over to ignorant, incompetent and unscrupu-