November 8, 1902.
RECORD ANT) GUIDE.
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l^ •» ESTABUSHED'^l^CHem'^1868.
XtatTfl) TO Ffej^L Estate . BuiLDiflc *;R.afrrzfmmE ,t{ousE3lou) DEOorifnDil,
Basiitess AftoThemes OF Ge^Ier^ iKtERFsi-
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Published etiert) Satardat/
Communications should bo addressed to
C. W. SWEET, 14=16 Vesey Street, New YorH
J. T. LINDSET, BuBlneas Managtr Telephone. Cortlandt 3157
"Entered al the Post Office, at Neio York. N. Y.. as set^ond-class matter."
\oi. L,XX.
NOVEMBER, S, 1902.
No. 1808.
THOSE who are disappointed because a post-election rally
did not materialize are sadly blind to the facts of the
speculative situation. It is not sentiment or indirect influences
that ara producing stagnation in the business and declines in
the prices of securities, but a lack of means for speculative oper¬
ations. As was pointed out last week, so long as rates for time
money are high there can be no large movements for a rise, for
the reason that these rates are a result and expression of re¬
sources employed to the full in legitimate lines of occupations
and that, consequently, while day to day accommodations may
he comparatively easy, tbis is only so because the demand is
light. With the market wanting the support of the speculator
and the liquidation of long stock that is always a characteristic
of times of keen commercial demand for money, prices cannot
advance, no matter what may be the inferential effect of passing
events. "When six months' money comes back to 4 per cent,
we may talk of a change in the movement of security prices.
This, however, we do not expect to see for some time to come,
certainly not this year. While money is the prime and prac¬
tically the only determining factor of the moment, there are
features of the situation that have a sustaining and encouraging
effect. The experience of the past two months must have
effected a strengthening of the banks in their relations to their
borrowers; the weekly returns frora the railroads show not only
that they are doing a profitable business themselves, but that
the community as a whole is busily employed; the effects of the
great corn crop are yet to be felt in the North, and in some por¬
tions of the South a banner cotton crop is expected. With the
finances of the country satisfactorily disposed of the people
may face the future with confidence, even if meantime security
IDrices are placed upon a lower level and a return to the whirling
speculation of the recent boom years is not to be expected. In
Europe there is neither change in the domestic conditions or in
the attitude toward American securities. Tbe movements of
exchange between the various markets lean toward an early
demand upon this centre for gold.
THE newspapers have shown a general disposition to ac¬
credit the local administration with the great popularity
of the Democratic State ticket in this city last Tuesday, and to
take it as an indication that the supporters of the administration
are disgruntled with what it has achieved and failed to achieve.
We presume that there is some truth in this interpretation of
the strength shown by Tammany, but if so, the discontent is the
result of really expecting more from the administration than it
could possibly accomplish in one year, or, for that matter, iu
ten years. It is an unfortunate aspect of all "reform" victories
that they depend upon a carefully worked up outburst of moral
indignation, which is really aiming at the accomplishment of im¬
possible results, and which when these impossible results are not
obtained encourages people to fall back upon the easy cynicism
and untruth of the statement that one lot of office-holders is as
bad as another. The Record and Guide is not defending the exist¬
ing administration of the Police Department; it is interested
chiefly in other branches of the city government; but it is well to
keep in mind that reform officials that come into power upon such
"moral issues" must necessarily prove to be disappointing and
that the responsibility for this disappointment lies less with
them than with the difficulty of the task by which they are con¬
fronted. Leaving the Police Department and certain minor mat¬
ters aside, the administration has certainly acted with great
wisdom and foresight in formulating its policy and providing
the necessary ways and means. It has realized more than any
preceding administration that New York is a great and growing
city, whose expansion is dependent upon a comprehensive sys¬
tem of public improvements, and it has endeavored to arrange
for these improvements on a liberal scale and in an enlightened
spirit. Its misfortune is tliat its present term of office will
expire before its work is more than begun, but that fact doeff
not make it deserve any less well of the property-owners, or of
tbose people who are interested chiefly in economic and efiicient
municipal administration. From this point of view the great
disappointment is that no attempt has been made to reorganiae
the city departments, for that is undoubtedly a reform of the
first importance; but such reorganization is practically im¬
possible without legislation, and it is doubtful whether the
necessary legislation could be obtained. It all comes back to the
statement that we are governed chiefly from Albany, and that
local administration can never be either so bad as their critics
declare nor so beneficent as their supporters expect.
Real Estate Situation.
THE real estate market during the past week has beeu
almost devoid of interesting features, as was only natural
during election week. The sales that have taken place have
been similar in character to those which have been announced
during the preceding weeks. The most important transaction
is the purchase of Aeolian Hall, the new building on 5th avenue,
just north of 34th street, for investment purposes by Mrs,
Francis Burton Harrison. The building was owned by the cor¬
poration known as No. 68 William street, one of the subsidiary
companies connected with the New York Realty corporation,
and its sale has some interest in indicating that the large
dealers interested in the United Realty and Construction Com¬
pany do not propose to make that corporation a holding com¬
pany any more than can be helped. In some cases they may be
obliged to "salt down," as it were, some large buildings which
cannot be sold to advantage, but apparently they do not pro¬
pose to embarrass themselves with many such properties. It
is to be a speculative and a building company rather than an
investment one. In this case, however, their remains obviously
a good chance for the organization eventually of another big
corporation which, while not avoiding building operations en¬
tirely, should be chiefiy devoted, as are so many of tbe Boston
real estate companies, to buying and holding real estate as an
investment. There is no reason why such a company with an
abundance of capital and shrewd management should not be
able to build up a large and remunerative property comparable
to one of the old Manhattan estates.
The piece of news in which real property owners are
likely to be most interested is the plan of the administration to
readjust the Sinking Fund payments, for if that plan is carried
through it would mean that from $8,000,000 to $10,000,000 less
money would have to be raised every year by taxation, and this
saving would involve a diminution of ten per cent. In the tax
bills. The necessity of this readjustment has been frequently
pointed out. It was Edgar J. Levey, now President of the Title
Insurance Company, but f.t that time Deputy Comptroller, who
first called attention to the absurdity of a Sinking Fund which
at the expiration of the obligations in 1928 will have a surplus
estimated at about ?300,000,000, and which results in adding
unnecessarily more than $8,000,000 every year to the tax levy.
The manner in which this anomalous condition of things came
about need not concern us here. It is sufficient that there is a"
possibility of saving more than $8,000,000 every year to the tax¬
payers without in any way doing an injustice to the city's
creditors or hurting the city's credit, and it is proof of the busi¬
ness good sense of the present administration that it has made
it plain from the start that it proposed to save this amount ot
money if possible.
The difficulty, apparently, was that the various kinds of in¬
come now paid into the Sinking Fund were pledged to thai*
Fund, and could not be recovered without breaking the con¬
tract with the city's bond-holders. The Deputy Comptroller,
Mr. James W. Stevenson, has, however, hit upon a plan which
accomplishes the result without doing any violence to the city's
"contractual obligations." His plan is, in brief, to obtain per¬
mission from the Legislature for the city to issue a new class
of securitiea, "the proceeds of which shall be paid into the Sink¬
ing Fund for the reduction of taxation, and which shall be
issuable only to the Sinking Fund Commissioners, and only to
the annual amount by which the revenues of the Fund exceea
its normal, safe, sufficient and scientific annual debt instal¬
ment." This plan is stated to be technically legal by the Cor¬
poration Counsel, and in that case we are unable to see how
any objection can be raised against it either on grounds of
public policy or justice. And, as a matter of fact, no such
objection has been forthcoming. Technically, of course, it la
unwise to sell bonds to pay for current expenses, but since
the bonds sold really represent current income, which has
been practically sequestrated by foolish provisions In existing
laws, this technical objection falls to the ground. It is not sur¬
prising, coBseQuently, that Comptroller Qrput bas ^een able to