.July. 26, 1902.





RECORD AND   GUIDE.





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Busii/ess A»i[> Themes of GeHw^ iKnJigaii

PRICE PER YEAR IN ADVANCE  SIX DOLLARS

published eVerp Satardag

Communications ehould be addressed to
C. W.  SWEET,   14.16  Vesey Street, New YorR





J, T. LINDSET. Business Manager





Telephone, Cortlandt 3167







"Entered ~d   he Pos   Ojiic




at New Tori. JV. T., as second" la s matter."





Vol.   LXX.




JULY 2G. 1902,                         No,  1793.





The Iiidcr lo Vuliime LXIX of ihe JRecord find Guide, cover-
itif/ the jierifid heiireoi January 1 aud June liO, 1002, is now ready
for delirery. Prive.^l, This Index in its eniart/ed ,f'orm is now
recognised as indisi>ensrible fo ei-cry one engaged or interested in
real estate and. building operatiuns. It rovers all transactions ~
deeds, mortyages, leas<s, auetion sales, biiildivfj jdans .iiled, ele.
Orders for the Index should be sent at once to the office of piiblica
tion, 14 and 16 Vesey St.

PRICES on the Stock Market were unsettled this week from
two causes; The temptation that rising quotations offered
to realizations and the snsincion of the party who appear to be
in control of the market. This party is credited with objects and
ambitions so remarkable and their methods ave so sensational
that quiet-minded persons prefer to be out of the way. They
threaten nothing less than the unsettling of railroad ownership
in the Northwest. They appear to be utterly foiled in their at¬
tempt to secure control of Chicago & Northwestern, presumably
to exploit its big surplus, and are now turning their attention to
St. Paul. The consequent advance of these prominent Northwest¬
ern stocks to quite unjustifiable figures is properly accepted as a
warning, because compensation for stocks accumulated under
such terms could only be obtained through manipulation of the
properties themselves in a way that would have a serious effect
upon the general situation. Something of this wild speculative
spirit has also been apparent in realty securities this week,
though,with the exception of one that has been extensively traded
in on the stock exchange, the transactions have not been large.
When this spirit is toned down, if it can be toned down, the more
wholesome movement can be resumed. The latter movement is,
however, dependent also upon crop news and an official report
may set it going or end it. Other conditions offer no cause for
dissatisfaction. The small amount of gold that was exported
this week had no influence whatever upon money, the rates for
which continue to be easy. Reports from Europe do not convey
the idea that the industrial situation has improved, and there is
apparent some nervousness regarding the speculative positions of
both London and Paris connected with South African affairs.





IN discussing municipal questions from week to week Mayor
Low is doing excellent service in at least compelling people,
who would not otherwise give them a thought, to see their im¬
portance and give them some attention. The initiative was
needed and cannot fail to he followed by beneficial results. When
his discourses take the form of suggestions, the Mayor doubtless
intends that discussion should follow, and that, thereby, his ad¬
ministration will benefit by the varying views and opinions brought
out. The reform of the sinking fund suggested in his first dis¬
course has pretty general approval. But two of his later propo¬
sitions, which directly touch the real property owner, are not
eliciting so favorable a response. The first that tax valuations
be raised in order to increase the borrowing power of the city,
has against it the unpleasant experience of 1898. In that year,
the city government increased the tax valuations as a part of
their plan to meet the pecuniary difficulties consequent on con¬
solidation, a simultaneous advance in the tax rate being the
other part, and the result was a paralysis of realty business that
endured until the effects of that plan were neutralized by the
improvement in business which we are still enjoying. It is not
unreasonable to believe that we are in a position at the moment,
where a prospect of a radical change in the economic conditions
surrounding real estate would have a similarly deterrent effect
upon its activity. The idea is somewhat prevalent that real es¬
tate is not assessed at its reasonable full value. The question
may be debatable, hut we would hy no means be inclined to take
the negative side of the controversy. The subject is too large
and important for our space at the moment, but we think that
when it is fully examined that the Tax Department can meet
any change of dereliction of duty.   So far, the process of analysis





has been to test valuations determined a year ago by transac¬
tions made with comparative recency. This is not scientific,
especially as regards property that advances at times with such
rapidity as that located in this metropolis. If it can be shown
that the Tax Department failed to apply to their work transac¬
tions available to them at the time they fixed the valuations it
will be another matter, but this we do not think can be done.
The tax assessors could not foresee advances in values, and if
they could it would make no difference, because anticipatory es¬
timates would not be legal valuations for tax purposes. Tho
Mayor's other suggestion, that the assessments for improve¬
ments be secured to the city by some form of mortgage, raises
ideas of complications hard to define at the moment but accom¬
panied by a feeling that they would be injurious; while, at the
same time, the order of the city's lien could not be advanced
because it is already first. If the idea is that the city could pro¬
vide for these local improvements hyissuing its bondsagainst the
mortgages and thereby leaving the bonds that could be issued
under the constitutional provision free for general improve¬
ments, something may probably be said for it. But, even if so,
before decided opinions could be expeci.- - the plan would need
elaboration and careful examination.





Development of   the Realty  Corporation

THE chief subject matter of discussion by the real estate
world during the past week has naturally been the pro¬
posed consolidation of various corporations, which have been
operating in Manhattan real estate during the past few years.
The most striking fact about this plan of organization is its
comprehensive character. It proposes to include practically all
the companies and interests whose extensive investments and
speculations have of late set the pace of the larger real estate
market of this city and given it its dominant character. These
companies and interests include many of the shrewdest and most
experienced speculators in Manhattan realty; they are hacked
apparently by some of the largest capitalists in the country; and
the organization proposed is nothing less than an attempt to
systematically exploit the high-priced real estate of this vicinity.
The companies mentioned as likely to form the new organiza¬
tion have in the past operated almost exclusively along lines that
would give their abundant capital its full advantages. They
have for the most part dealt only in parcels situated in the
financial district, Broadway, Sth avenue and the most impor¬
tant cross-town streets. Occasionally they only purchased plots
for resale; but more frequently they have transferred them to a
subordinate company specially organized for the purpose; and
these sub-companies have improved the plot with an offlce
building, lofts, or some other appropriate structure. Their op¬
erations have been responsible for more than a half of the many-
sky-scrapers erected during the recent years, and for a still
larger percentage of the high prices recently paid for property
in the financial district and elsewhere. Should the new organ¬
ization pursue the same policy on a larger scale, it would nec¬
essarily become almost as dominant in the larger speculative
operations iu Manhattan realtyas the Steel Trust is in the mining
of iron and the manulacture of steel. It would supply much the
most important demand for high-priced real estate, and while
it would not be without competition, it would be in a position
substantially to control its chosen field.

This comprehensive organization of New York real estate
companies is obviously the natural culmination of the re¬
cent speculative movement; and the Record and Guide does not
claim any unusual degree of foresight in having frequently pre¬
dicted this outcome. It stood to reason that these companies
would have to organize themselves on a scale whicli would give
them a large and quick market for their securities. They were
controlled not by investors, who formed corporations for the
convenient holding of real property, but rather by speculato;s,
who bought for the sake of selling at a profit. But the people in
a position to purchase buildings worth several million dollars are
few in number; and obviously much the simpler and more re¬
munerative plan was to sell to the public in small quantities the
securities which represented the new buildings. But this can
be done much better on a large than on a small scale, and hence
consolidation was inevitable. Such buildings as the Broad Ex¬
change, the Cumberland, No. 68 William street, etc., will be
transferred to the new company at figures representing in se¬
curities very handsome profits on the original investment, and
the same thing will be done with the property, such as the Bo¬
reel Building and the Plaza Hotel, which have been bought for
improvement. Doubtless a larger company owning a dozen or
more sky-scrapers will be able to manage such buildings ad¬
vantageously and economically—just as it can by means of long
and large contracts for building materials erect new ones more
cheaply  than can  a  smaller concern.    Consequently the new