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September 14, 1901.
RECORD AND GUIDE.
313
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De/oteD td m- ^^ATE. BuiLDiflc AR-cKitectufie .HousoloiD DEeoF^uiorL
Busit/Ess AfiDThemes of GErtERAl.IJftERpsT.
PRICE PER YEAR IN ADVANCE SIX DOLLARS
Pnbtished eVerff Saturday
OommunlcationB ahould be addreaaed to
C. W. SWEET, 14-16 Vesey Street. New YorK
J. T. LINDSBY, Business Manager
Telephone, Cortlandt 1370
"Entered at the Post Offi,oe at New York, N. Y.. as second-class matter.'
Vol. LXVIII.
SEPTEMBER 14,1901.
No. 1748.
President MeKinley's death is announced, but still lacks cou-
firmation as we are going to press.
AN anxious week closes with our doubts and fears revived by
tbe latest news from BufEalo, and our desire Is moreto draw
sympathy to the suffering President and attention to his many
great and good qualities, than to comment on the commercial
probabilities that await his fate. "Tho' I may die the grass will
grow," says Tennyson, poetically expressing the necessity of the
world's practical work going on no matter what tragedy may be
enacting. Admitting this, we must point out that the outlook is
obscured by the sad event that is occupying all minds, and the
situation, previously not any too good, is made worse by it, a
fact that is likely to be intensified by a fatal termination to
President MeKinley's Injuries. Our recent prosperity was in a
large measure due to a commercial political programme that had
not been completely carried out, but was in wise, tried and safe
hands. For some time doubt must exist whether the task will
be finished in the same way that it was begun and this doubt
must create hesitation, if not obstruction.
IN our own market the ordinary incidents have not been fav¬
orable, though these have not had full play owing to the
supporting policy that became necessary last week. Where
events have been allowed to work they have reduced values, so
that at this writing Stock Market prices are, as a rule, lower
than they were made by the break of a week ago. Higher rates
for money and further crop damage have been the main second¬
ary unfavorable features, but against them may be set the union
of banking interests and the Treasury to hold the situation in
hand as much as possible and to make the decline in prices as
small and slow as possible. An encouraging offset may also be
found in the surprising continuance of large railroad earnings.
The circumstances, however, call for considerable further liqui¬
dation, and it is needless to say what the effect of that will be
on prices. Europe sends us her sympathy heartily, but is no
aid in sustaining values; on the contrary her influences, like
those at home, are directed against them. Not only is she a
seller in this market, but her banks show a disposition to ob¬
struct and delay a westward flow of gold, though it looks as if
that cannot be delayed much longer, if it cannot be said to have
already begun through the transmissions from Australia to San
Francisco. There is no change in the European commercial sit¬
uation. Business is still a little better than it was in the sum¬
mer, but statistics relating to labor and wages show that the
contraction of industrial activity that began a year ago is very
considerable and working out -its logical effect on pay.
THOSE whose business is the insurance against loss from
or the extinction and prevention of fire are naturally the
severest critics of modern processes of flreproof construction.
One of these gentlemen opened an address before the Engineere'
Club of Philadelphia with the amusing and sweeping remark:
"There is but one flreproof building in Philadelphia; that is the
powder magazine, and it is empty." This reminds us of the ideal
fireproof building once described to us by a high authority on
fire prevention, which, though made up of bricks and mortar
and piled in stories, couldhave been best described by the word
mausoleum, or magazine, as the Philadelphia gentleman has it.
From the point of veiw of the fire expert, to be flreproof a build¬
ing must contain nothing flammable, or anything subject to easy
injury by fire such as glass—in short a tomb, which, like a tomb
to continue fireproof, must be sealed up when its contents are
stored. This, however, is not the reasonable or practical defini¬
tion of fireproof construction. Buildings used for business and
residence must have light and as much of it as can be obtained
with reasonable safety. The necessary openings for this purpose
render it or its contents liable to attacks of fire from the out¬
side, as was the case of the Home Life Building, and the nature
of the furniture and goods generally placed in buildings pro¬
vides the materials for injury to or destruction of the building
itself, material flammability or combustibility being simply a
matter of intensity. So far as the constructor is concerned he
has fully discharged his duty when he has made a building of
itself impervious to fire. The rest he may fairly leave to the
prudence of the occupants, and the vigilance of the Fire Depart¬
ment. Those who doubt the sufficiency of the modern con¬
struction are fond of pointing out the cases where fireproof
buildings have been brought down by the element against whieh
they were supposed to be impregnable, but if they chose they
could cite many more instances where fireproof construction
held conflagrations within very small limits or interposed to
prevent the spread of fire among buildings ol old construction
and thus averted great calamities.
^
Real Estate Corporations Again.
THE Record and Guide has of late freely made the predic¬
tion that the existing tendency in the directions of cor¬
porate ownership of New York real estate would continue to
prevail until it worked important changes in the methods where¬
by large blocks of metropolitan real estate were owned and man¬
aged. Some people have interpreted this prediction to mean
that these large corporations would force the small operator to
the wall; but as a matter of fact nothing further from our
meaning. The tendency in the direction of joint ownership is
not concerned with the accumulation of large numbers of small
properties. It has arisen entirely because larger and larger cap¬
ital is required to conduct the more expensive class of building
and speculative operations in this market. There still remains
an abundance of room for smaller capitalists to deal successful
in real estate, and the frequency with which the names of these
smaller operators have appeared in the real estate news of the
past few months is a sufficient indication that they are as much
alive to their opportunities as ever. It so happens that these
small operators have a much larger field for their trading just
at present than the small builder; but the turn of the latter will
come within a few years. Indeed, if, as seems possible, the
Bronx is to be improved chiefly with one and two-family dwell¬
ings, the builder with only a limited capital will have a better
chance to operate than he has had at any time since the early
years of the West Side movement.
Another aspect or consequence of the increasing importance
of real estate corporations has been making difficulties for one
of our correspondents. He objects to the statement of the Rec¬
ord and Guide that large proprietary real estate trusts would be
the outcome of the existing movement on the ground that there
is not sufficient margin between the profits to be derived from
real estate and the ordinary interest on capital to justify the
formation of large proprietary corporations. Such companies
would have to pay five per cent on its capital stock, as well as
at least four per cent on the mortgage bonds, which it would
sell to the public, and the real estate owner, who, unless he is a
shrewd and skillful dealer, can get more than five per cent on
his property is doing well. It is a fact of common knowledge
that a number of large office buildings yield not more than four
per cent and sometimes less. What margin, then, is there for
the intermediation of a proprietary company that must pay sal¬
aries to its officers, and incur a number of expenses, with which
the ordinary owner of real estate can entirely dispense?
The answer to this question is sufficiently simple. If small
capitalists care to invest in real estate at present, when they are
obliged to earn their five per cent by overlooking their
property, and attending to many wearisome details, they
would surely be willing to accept a half a per cent
less, in order to get rid of the bother and anxiety of such man¬
agement, and in a large corporation a half of one per cent on
the capital invested ought abundantly to cover all expenses. It
must be remembered, of course, that such proprietary corpora¬
tions or trusts would be in the nature of fiduciary institutions.
They would not pretend to offer large returns to the holders of
their securities. What they would offer would be a safe invest¬
ment, and as large a rate of interest as is obtained from divi¬
dend-paying railroad shares. Such securities would not, indeed,
have the speculative chance of large returns, which always gives
an increased value to railway shares, but on the other hand,
they would be in the way of profiting from the slow but certain
increase in the value of New York real estate. It should be
added that the success of any attempt to distribute real estate
values in this city among a large number of small holders must
depend more than upon anything else upon the ability and finan¬
cial standing of their managers. The officials must be both ex¬
pert judges of the value of New York real estate, and at the
same time as worthy to inspire confidence in small investors as