■)iH1uar,v3M    ^ 3





Record and Guide.





113







Be«6teB io R^t- Estate . BuiLoiKg A^cidTECTdi^E .Houscrfou) DEQORATlflfe
PRICE, PER TEAR IN ADVANCE, SIX DOLLARS.

Published every Saturday.
Tklephonb       ....      Cortlandt 1370.

Communicationa should be addressed to

C. W. SWEET.   14 &  r6 Vesey St.

J. 7. LINDSEY, Business Manager.

■ Entered at the Post-office at New Vork, N. F.. as second-class matter.''''





iutioducetl 11 tinner tunc ititii stock operations 6d the exchanges
both of Berlin and Vienna.





VOL.  U.





JANUARY 28   1898.





.-^o. 1.208





THE bear party in the stock market has, much to its own chagrin
anil discomfort, very materially lielpcd the bull movement-
There were signs that the market would drift into dullness until
operators on the short side, believing that gold shipments would
create a scare, put out large lines in the industrials and got caught.
The obstinate ones who have refused to cover do so in the hope that
Congress will still order an investigation of these large business
combinations before adjourning. The likelihood of this Congress
doing anything but squander the time until dissolution is very
remote. When once covering has been compelled it is probable
that a period of hesitancy and waiting will follow. This is usually
the result of such a piece of excitement as this week has
seen. It will not follow that the bull market is at
an end. Railroad securities have not as yet participated
as much as they should do in the advance seeing tbe business that
is before them this year, and as that business will be discounted a
good while ahead of its occurrence it is reasonable to expect that
railroad stocks will go up now. If they do not it will show that
pe^i^le do not understand the change that has taken place in the
intrinsic value of railroad securities by reason of the small amount
of new mileage built in the last five or six years. When they do
wako up to this fact their confidence is as likely to be overdone as
their indifference now is.





THE figures recently published of the state of the industry of
manufactm'ing cotton in England serve to explain the stub¬
born insistence of the manufacturers in reducing the wages of their
wcrkingmen.    When it does not pay to operate a mill, the owner
thereof need not feel very bad at the necessity of shutting down ;
and it is literally true tbat more money has been lost than made in
this branch of trade during 1892.    The returns for ninety-nine joint-
stock cotton spinning companies show profits of about £70,000, and
losses of about £164,000.   These companies have a total capitaliza¬
tion of about £7,300,000, of which half is borrowed money and half
is  share  capital.    The  borrowed   money, of  course, received  its
interest; and if from  the  amount nf  money paid out as interest
is subtracted the net loss on trading, the residue gives three-fom-ths
of one per cent, as the amount of money earned upon the whole
capital.    In view of this'fact the history of these same companies
for the past few years is interesting.    During the year 1890, instead
of losing £94,000, they cleared £383,000, but 1-90 was by far the
beat year for a decade.    In 1891 the average profit to each mill was
£383; in 1890 itwas£4,220; in  1889 it w.is  £2,565; in  1888 it was
£i,925; in 1887  it  was £98'i, while In 1886 the  trading showed a
loss nearly equal the loss of the past year.    It might be thought
that an industry, the returns of which fluctuate so widely, would
at its best earn asum large enough to compensate the shareholders
for all loss during the off years : but tbe figures given above would
indicate that even in the most prosperous times fhe returns on the
capital  invested  in   English  cotton  spinning   are  comparatively
small.    Perhaps, however, the mills whicli   are operated  by  joint
stock companies are not the richest and most profitably managed
mills in the trade.    After such an exhibit, it is scarcely likely that
the strike of the operatives, to avoid lower wages, will succeed.
Tbe Hungarian ministry have finally been successful in coming to
an agreement with the Rothschild syndicate, concerning (he loans
for the  conversion aud   the currency reform.    The  result  of the
negotiations   is    that     tiie   Hungarian     Covrrnment   emits   an
irredeemable   loan,   free    of    taxes,    and    bearing     interest   at
4 per cent, for   the   redemption   and conversion of   the 5 per
cent  Hungarian note Rente and a large amount of railway shares
and debentures.    Of the total amouat of  1,020 million crowns the
Syndicate undertakes the half immediately and the rest at option
during the period fixed for th'? h^tal operation.    But it is bound to
. undertake the second half also.    The success of the conference has





WHEN Comptroller Myers some weeks ago came out with a
letter declaring that in case the  Manhattan  Company was
granted any additional privileges it ought to be made to pay for the
same,  the newspapers  unanimously   applauded   this  suggestion.
They all assumed that it would be the simplest matter in the world
for the Commission to place an  exaet  value on the property of
which it was disposing ; and they all assumed that in this way the
city would not lose anything by the bargain.   The Suening Pos(
gave exijression to this assumption in the  following words: "The
only way to meet this problem is to exact conditions beforehand
by  which the city shall reap a profit by way of a tax or by
a percentage of the pross receipts commensurate with the gains of
tbe enterprise.   This may easily be secured now."   We take the
libertyof doubting whether the process of securing a percentage
of the gross receipts " commensurate with the  gains of the enter¬
prise " can be secured as " easily" as the Post and its meaner con¬
temporaries imagine.   In what way can the Commission determine
what percentage of the gross nceipts should be demanded!'   The
valueof property offered for sale is generally determined  in either
one or two ways—either by its cost of production or by the demand
which exists for the property in question.   In the present instance,
of    course,    the    Commission    is    not     disposing    of     any¬
thing     which    po-ssesses    a   calculable    cost    of    production;
and     even     if    the    franchises     had     a    cost    of    produc¬
tion   which   could   be calculated, it would   be uselfss in   guid¬
ing the action of the Commission, because the cost of production
determines value only under the leveling action of competition.
In the present instance, as the Post admits, the franchises to be dis¬
posed of are in the nature of monopoly value which is determined
by the demand existing therefor.    For some of the privileges in
question, such  as  the  third  tracks on  the  present structure, the
various connections between the east and west side lines, etc., the
only possible purchaser is the Manhattan Company.    Perhaps that
corporation   will   be   willing   to   pay   a   little   something  for
the    opportunity     to    make    more    money    offered   by   the
privileges    which    it     wants;    but    imder   the   circumstances
it is ridiculous to suppose that the city will be able to get a tithe
of what those privileges will be worth to the Manhattan Company,
neither will the city be verv much better situated in the matter of
selling a franchise for a new elevated road, independent of the
Manhattan Company, and running north and south from the Bat¬
tery to Inwood.    Let us suppose that a legitimate competition took
place for such  a franchise.     The  sum  which the city could[get
would be determined, not by its value to the Manhattan Company,
but by its value to au independent corporation.     Yet,  obviously
such a franchise could be operated so much more profitably as a
part of the Manhattan system that in time it would surely be joined
to that system;  and the  percentage of  gross  receipts  which  the
eity was gftting would  be  uo    more  •■commensurable  with  the
gains of the enterprise" than the cost of the canvass and paint
would be " commensurable" with the value of a painting by some
celebrated artist._____________

THE Rapid Transit Commission has not got au easy task in dis¬
posing of these franchises for anything like their real value.
In truth it has a task which it will find quite impossible to perform.
The way it will be performed can easily be predicted. The Com¬
mission will selecta percentage of the gross receipts that will sound
■well to pronounce. This is what the Comptroller did in disposmg
of the franchises of the Lexington avenue and Ninth avenue roads
to the Broadway syndicate. He had no reason to suppose that 5
per cent was in any way " commensurate with the gains of the
enterprise," because he did not know what the gains of the enter¬
prise would be, aud because, as a matter of fact, these gains are not
a constant but an ever-increasing percentage of the gross receipts.
In the same way the Rapid Transit Commission will not have the
remotest idea of the actual value of the franchises ; and conse¬
quently it also will have to choose some percentage which makes a
good appearance. The newspapers are easily satisfied in these
matters. They did not raise a word of protest against the
Comptroller's prejudice in favor of 5 per cent. One might
have thought from the silence which the editors of om- daily jour¬
nals preserved upon the matter that the sale of the street railroad
franchises had been conducted upon the most approved businesH
principles. Numerous other instances can be pointed out of their
willingness to accept gratefully in the name of the public any little
trifle which these monopoly privileges can be sold for. Recently
the Brooklyn City Railroad offered the magnificent sum of 1^250,000
for the permanent possession of something like fifty miles of ytreets
in that city, and the newspapers actually congratulated the people
on the" possibility of getting these few thousands. It is no
wonder that a traction company propose to inject $5,000,000
or $6,000,000 of water into the capitalization of that company,
which is already more than half fictitious. Another instance of
the same complaisance may be found in the East River Bridge Bill,