June II, 1904.





RECORD ANB   GUIDE





1369





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DE/0TH)I0f^LEsrAJE.BuiLDIf(G *tRCJ(rrECTURE,t(cHlSnlDLDDEG<»fIIOll.

.Busii/es5 Alto Theses OF GeiJer^ iKitRpai.
PRICE  PER YEAR IN ADVANCE SIX DOLLARS

Published eVerg Saturday

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Vol. LXXIII.





JUNE II, 1904.





No. 1891





IT is a year now since the strikes in the New Yorit building
trades and the collapse in WaU street put an end to tbe
great speculation in Manhattan real estate, wliich had talcen
place in 1901 and 1902. During the season of 1903-4 while rent¬
ing has been good, and while a lively speculation has been tak¬
ing place in certain kinds of tenement house property, the actual
purchasing demand for real estate in Manhattan was less than
formerly. Residences of all kinds, small and gi'eat, have been
difficult to sell. The insistent demand for business property
owing lo the expansion of business decidedly decreased, the
Sth avenue section being the only exception. Investors did not
want to put their money in real estate; and money lenders have
been loath to advance cash with real estate as security. Yet in
spite of all these depressing conditions the so-called "boom"
of the preceding years has not been follow.ed by a collapse.
These districts of the city, in which the most considerable ad¬
vances had talten place became dull, but there was no wealtness.
Even the builders of expensive residences managed to get out,
if not prosperously, at least without disaster. The only wealc
spot has been in the one apartment-hotel district, and there
over-building had manifestly talten place. These facts show
clearly that the Record and Guide was right in claiming that
the speculation of a year or more ago was justified by the busi¬
ness growth of New York, and the readjustments consequent
on that growth. Yet the contrary opinion was prevalent in
the financial district and accounts for tbe extreme conservatism
which the chief money-lending institutions have used in buy¬
ing real estate mortgages. This conservatism has been carried
further than was necessary. New York is under rather than
over-built at the present time; and there is room for a large
amount of new construction of all kinds—apartment-hotels ex¬
cepted. It is probable that this fact will be discovered during
the coming wiinter and that building operations will not be ham¬
pered next season by imnecessary caution on the part of money¬
lenders.





X S the spring passes into summer the general outlines of the
■**■ business situation become very definite. There is a mani¬
fest slackening of industrial and commercial activity through¬
out the entire country. This slaeltening is much more con¬
spicuous in the manufacturing districts of the East than it is in
those parts of the West, which depend chiefly upon agriculture
for their wealth; but it is spreading slowly but surely through¬
out the entire countiT. The confident business expansion of
1902 has been superseded by a disposition to go slow, which
is having a depressing effect on railroad earnings. The con¬
sequence would undoubtedly be a decline in the price of rail¬
road and industrial securities were it not that the conditions
of the money market has already effected a drastic reduction;
and the doubtful question at the present time is whether this
reduction, produced as we have said, during a period of com¬
paratively prosperous business, has been sufficient to discount
the real change which has talten place in the volume of trade
and the profits to be derived from it. Tbe assertion could be
made with some confidence that the falling off in prices, which
took place last summer, was suflieient provided the railroads
were able to reduce expenses in the same proportion that gross
earnings are reducing themselves, but so far the loss in gross
income has been equalled by the loss in net income. The prices
of labor and material still remain unmanageably high; and
this fact makes investors wonder whether some further reduc¬
tions and readjustments will not have to be made before a
proper equilibrium is established between business and profits.
Consequently it is improbable that the easy money market
and the idle capital which is being accumulated will be used
to any great extent during the coming summer for the pur¬
chase of stocks.    Men will prefer to wait until crop prospects





have become more assured, and until it has become apparent
that coming changes will be for the better rather than the
worse. If the yield of cotton is as large as it promises, and if
the grain crops are as good ag the average, there seems to be
no reason to anticipate any severe or prolonged depression.
The consumptive power of the country is enormous; its indus¬
tries are better organized than ever; the farmers are, on the
whole, in a safe and prosperous condition; and recovery should
be rapid as soon as it is apparent that it is justifiable.





THROUGHOUT the spring the saving fact about the steel
business was tbe large demand for the lighter grades of
manufactured steel. While rails and structural shapes were
being made and sold ouly in small quantities, the resources of
the mills were taxed to supply the demand for wire nails, bars,
and finally of plates. During tbe past month, however, the or¬
ders for these lighter products have also very much diminished;
and the effect of this diminution upon the earnings of the steel
companies may be serious, particularly since there is no evi¬
dence of a j-evived demand for the' heavier products.
Altogether it is evident that the iron and steel business will
have under any circumstances a very lean year. The consump¬
tion is, indeed, still very large, and the earnings for the current
quarter will be much larger than for the preceding quarter.
But this consumption is diminishing, and it is decidedly less than
the producing capacity of the mills. It loolis as if the third
quarter would be a very bad one indeed for the Steel Corpora¬
tion, and consequently a very bad one for the railroads depend¬
ent on the steel industry. There have been reports that a
foreign trade is again being built up to replace the diminution
in the domestic demand, and that this trade already amounts to
100.000 tons a month. It is very much to be hoped that such is
the case, because in the long run the stability and the prosperity
of the American steel industry depends upon its ability to sell
its products cheap enough to get and to hold a considerable
export tonnage. The events of the next year in this and otlier
respects will show clearly whether the reorganization of the
steel industry, which culminated in the formation of the United
States Steel Corporation, has really made for efficiency and
economy as well as stability, or whether it has made for sta¬
bility at the expense of efficiency and economy.'





X IMONG the various projects for a memorial to the late
-C^ Andrew H, Green, the most Important, and in many re¬
spects the most useful, is that for a Civic Museum for New
York. Mr. Green was closely identified with many Important
movements that added much to the greatness of New York as a
city and to her beauty and wealth as a metropolis. It
would seem particularly fitting, therefore, that a memorial to
his memory should take the form of a museum which would
illustrate the manifold phases of New York's life and history.
The plan is frankly modeled on that of the Musee Carnavalet of
Paris, which is by far the most extensive museum of its kind in
the world, and one of the most interesting of the Paris museums.
New York has plenty of material for such a museum, and it
would have positive public value, not only in familiarizing our
citizens with the historic aspects of their city, but as a place for
deposit and exhibit of many interesting plans and proposals for
public improvement. The value of such a museum must greatly
increase with its growth, and it would undoubtedly keep Mr.
Green's memory more thoroughly alive than a monumental
memorial, no matter how grandiose or ornamental such a
device might be.





^r- HE law suit about the lease of the Gilsey House,
^ the fact that the income of that hotel is scarcely suffi¬
cient at the present time to pay its expenses indicates one of
the inevitable results of the erection lately of so many new and
sumptuous hotels. The older, smaller and less well-equipped
hotels are bound to go. From the revival of business in 1897
until the middle of 1903 the hotel business in New York was ex¬
traordinarily prosperous. The lessees of the larger hotels made
fortunes, while even the older and smaller houses did a profit¬
able business. The trade was so lucrative, however, that rather
too many people were tempted to rush in, so as to secure a
share of it; and a large number of large hotels are now in the
course of erection which is. disproportionate even to the needs
of New York. None of these new buildings is as yet open for
business, but the St. Regis will open this summer, the new Hotel
Astor and the extension to the Imperial in the fall, the Knick¬
erbocker in a year or so, the Belmont and the new Sturtevant
soon thereafter and finally the new Brunswick a couple of years
later. Profitable as is the hotel business in New York, it is
inconceivable that there will be room, particularly during a
period of hard times, for so many new and spacious hotels; and