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May 14, 1904.
RECORD AND OUIDE
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De/OTED to f^L EISTATE. BUILDI/Jb ^RCJflTECTl/RE ,h(oiJSElfOLD DEGOfiATIOtl,
Busit/Ess Alio Themes OF GeiJer^I IrJiEi^Esi.
PRICE PER YEAR IN ADVANCE SIX DOLLARS
Published eVertf Saturdas
Communications should I
C. W. SWEET. 14=16 Vese
J. T. LINDSEY, Business Mana^-er
. adilrossod to
â– Street, New Yort
Tolephono, Cortlandt 3157
-Enln-ed at Ihe Post Offia
? al New Tork. N. T.. as s
evond-class matter."
VoL LXXIIL
MAY 14, 1904.
No. 1887
THE stock market has been suffering this week under an
accumulation of bad news; and it is no wonder that
prices have staggered. The winter wheat crop, it is admitted,
is much below the average; gold exports have been continuous
and heavy; liquidation has been taking place in Steel securities,
plainly indicating a fear on the part of the trade that earnings
will not be sufficient to maintain tlie present dividend rate; and
railroad earnings have almost uniformly shown decreases. All
this has had an unsettling effect and has enabled the bear opera¬
tors to depress prices. There has been no evidence, however, of
liquidation, except in Steel shares; and considering all the cir¬
cumstances, there have been fewer and smaller recessions in
prices than might have been expected. The truth is that the
effect of less active business upon railroad and other earnings
has been already pretty well discounted, and unless business be¬
comes very much worse than it has been there is no par¬
ticular reason to expect any serious liquidation. It is not to
be supposed that under the circumstances prices will advance,
but on the other hand it will require worse news than any which
has yet developed to lower them much further. A tolerably com¬
plete crop failure miglit do it; but iu the absence of dearth
among the farmers it is tolerably certain that the worst that can
happen until after the election is a slow aud waiting market.
It has heen the prosperity of the farmers which has pulled the
business community through wiiat might have meen a much
graver financial crisis, and if that prosperity continues, as it
well may in spite of the probable failure of the winter wheat,
a general recovery is the probable event easily next year.
ONE could write a description of the rear estate market of
the weeli before last which would apply, word for word,
to the real estate transactions of the week just finished.
There is the same slight diminution in the number of transac¬
tions compared with those of April, the same preponderance of
tenement-house trading, the same slack demand for private
dwellings, the same fair demand for vacant lots, and the same
absence of individually interesting and novel transactions. It
is improbable that any further very important operations will
be consummated during the present spring. There are plenty
of projects afoot, but their progenitors have apparently reached
the conclusion that they can buy and build cheaper a year from
now than they can at present. In this we believe them to be
mistaken; but the delay will do no harm. A moderate amount
of building activity is assured for the present year, chiefly in
the cheaper grades of houses and it is to be expected that
throughout the summer and fall a steady stream of flats and ten¬
ements will appear in the records of the Building Department.
This branch of constructional activity will increase rather than
diminish as money becomes easier to borrow, for renting con¬
ditions warrant practically an iudeflnite amount of it. This
fact will keep up the demand for vacant lots, while at the same
time the trading in tenement-houses will diminish. In the
meantime in case the labor situation continues satisfactory, con¬
ditions will be brought about which will be all in favor of very
lively activity next winter.
THE proposals submitted to the Rapid Transit Board, at its
meeting last Thursday, for the construction of cross-town â–
moving platforms to be operated in connection with the system
of the Interborough Company, makes the competitive position of
that company very much stronger. The weak points of the offer
of the New York City Railway Company has always been (1)
that if transfers were issued from its cross-town surface lines
to its longitudinal tunnels, those surface,, lines, already very
much congested, would become intolerably so, and (2) that the
Lexington Avenue-Broadway route wouM practically duplicate
the existing tunnel from 42d street south/and would so far be a
waste of money. Very certainly two subways, one running
along West Broadway, Seventh avenue and upper Broadway, and
the other along Elm street, Fourth avenue and Lexington ave¬
nue, connected hy moving platforms at the important cross-
town streets, would constitute a very much better planned sub¬
way system than a Broadway-Fourth avenue and Elm street
tunnel operated by one company and a Lexington avenue-Broad-
v.-ay-West Broadway-Seventh avenue and 34th street tunnel
operated hy the oLher. The transfer privilege from the surface
cars would not compensate the city for such an inconveniently
operated and wastefully planned system—particularly when the
Interborough Company can offer transfers with a system of
cross-town moving platforms. In our opinion the Interborough
Company has now the best of the bidding, and the New York
City Railway Company should raise its list of attractions. It
should offer, that is, to include a four-track First avenue tun¬
nel in its system, as well as some provision for rapid transit
along Jerome avenue. The Bronx has a right to protest against
the neglect with which it is being treated in the plans of the
Commission. It is entitled to a Jerome avenue line, and to better
provision for express service from the Harlem River south.
The Value of Business Stability.
(^ NE difference lietweeu a mature and a comparatively imma-
**-^ ture business community, is that in the case of the latter
there is a great lack of business stability. For a period of sev¬
eral years industry and commerce will be exceedingly profitable
and its volume will increase enormously, but the very excess of
profits and the large volume of transactions tend to produce con¬
ditions which eventually bring about an equally severe reaction.
Of course, the tide of industry and commerce waxes and wanes
also in countries whose business habits are more completely
formed; but the changes take place within narrower limits.
While the periods of prosperity are less of a feast, the periods
of depression are less of a famine, and the business of a country
naturally struggles towards a condition in which the inevitable
fiuctuations of trade do not become too severe. In a rapidly
growing country, such as the United States, the business oppor¬
tunities have been wonderful and have enabled many men to
accumulate prodigious fortunes; hut if one could see equally
clearly the other side of the shield, it would be found that the
failures are more numerous than the successes. The wreckage
is much larger than it is on the smoother seas of a more fully
developed industrial condition, and it is only the instinct of
self-preservation which forces the business men of a country
to get away from business methods and habits which balances
such a year as 1872 with a year like 1873, or an 1890 with an 1893.
There can be no doubtthat the period of high profitsand volum¬
inous business which culminated in the spring of 1903 had man>
of the old fatal characteristics of a "boom," The difficulty
about a "boom" is that under the infiuence of the opportunities
and the excitement it affords the usual conservative business
motives fail of their effect. An increase in prices does not di.
minish the volume of business as much as it should, because,
business men find it easy to figure out that the opportunities
being what they are, they can make money in spite of the higher
prices. The enormous business of 1902 had just this character.
In spite of the high rate of wages and the high price of supplies
of all kinds, the raih-oads found it impossible to retrench either
in their operating expenses or in their outlay upon improve¬
ments. The enormous business which was offered had to be
carried at a higher cost, and the improvements, also, were ne¬
cessitated by the volume of traffic. The management would
doubtless have been glad enough to postpone these expendi¬
tures at least in part until a period of cheaper labor and sup¬
plies; but they were unable to do so. The traffic which was
being offered demanded that money be spent freely all along
the line. At the same time these prices were so high that at
the first sign of any diminution in the volume of business, pru¬
dent managers would cut down their expenditures in as drastic
a manner as they could. We all know how the condition
worked itself out. In a few months the steel industry, which
depends to a large extent upon the purchases of railways, passed
from a period in which it had more business than it could handle
to a period in which the companies could scarcely earn their
fixed charges. Other industries also, passed through a similar
change; and it looked for a while as if the last six months of
1903 and the first six months of 1904 would repeat the severe
depression of ten years before.
These sinister forebodings have not, however, been entirely
realized. It is true that various excesses were committed during
the high times of 1901 and 1902, and it is true that these ex¬
cesses did encourage a corresponding reaction; but It is also
true that the new organization, which the larger industries of