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October 29, 1904
RECORD AND GUIDE
e> â– * ESTABLISHED ^JAWPH2l-lS6S.
De/oteD p Rf\L Estate , BuiLDifjb Af'.cH'rrECTjRE ,Haii seHoid DEaffifntuC,
BusijIess aiJdThemes Of GeKer^I IiJte^st. "
PRICE PER YEAR IN ADyANCE SIX DOLLARS
Published eVerg \Sattirdag
\
Communications should ble addressed i
SWEET, 14?16 Vesey\ Street, New YorK
J. T. LINDSEY, Business Manager \ Telepbone, Cortlandt 3157
"Entered at the Post C
e at Neio York, N./Y.. as second-class matter."
Vol. LXXIV.
October 29, 11904.
rp HE sto^k market received some- very heavy shbL-iJi.' -thi"
^ week. There was the threatened war between Russia
and Great Britain, the report o? the Steel corporation which
was less favorable than was antlcfrated, the gold exports; and
certain expressions of very authoritative opinion that the specu¬
lation wa5 over-reaching itself, f" certainly stood the shocks
very well. Severe declines were fcllowed by rallies, and Friday
was as urmal a good day. Whatever the weakness of the situ¬
ation frcm the point of view of the speculators for an ad¬
vance, the present level of prices is certainly very stubbornly
maintaired. The men who are carrying stocks are not in an
apprehensive or weak position. They still on the whole control
the sitr.ation—whether by sufferance or substantia! strength re¬
mains to be seen. From the point of view of investment values
it certa:nly looks as if the limit had been reached, and that any
tighter ing of the money marlcet would cause a more consid¬
erable reaction. But it is possible tbat no tightening of tbe
money market will take place this fall. At any rate it looks
as if, il- case any slump comes along, it will come slowly rather
tban unexpectedly and that speculators who are carrying stocks
will bave time to get out.
rp HE real estate business of the past week bas continued to
be chiefly in vacant lots; and it has differed from tbe
business of the week before more than anything else in tbe
circumstance that the :operators htve been passing tbe lots on
to builders. Tbe total sales bave been phenomenally large
amounting to about ISO in Manhattan and 120 in the Bronx.
Tbe Bronx total is particularly impressive, reaching as it
does to a larger total than both IVIanbattan and tbe Bronx for
the corresponding week last year. A total of over 840 lots bave
been sold in tbat Borough ag.anst abjut 240 on Washington
Heights and 89 in the Lenox Ave. section. It will be seen con¬
sequently that the tide of business north of the Harlem has
been swelling to an extraordinary bulk. Another interesting
fact of the weel^ has been the appearance of the Century Bealty
Co. and the United States Bealty & Construction Company as
buyers of a large block of Bronx property. It was inevitable,
as tbe Record and Guide has pointed out severa'. times of late,
tbat the large speculative companies would begin operations
in unimproved lands along tbe Subway. Tbe activity and tbe
profit lie in transactions of this kind. For the present they
mnst forsake tbe region of sky-scrapers in the middle reaches
of Manhattan and help along the buildmg up of the outer mar¬
gin of the city; and the wonderful thing about New York as a
field for real estate and building operations is the great variety
of the opportunities offered. Sometimes one kind of opportunity
prevails and sometimes another; bnt there is almost
always a decent chance for profitable business. Another
noticeable tact is the extent to which fiats are being adopted
as the form of improvement for Washington Heights.
So far as we are aware none of the sales of the past
few weeks have been made to builders who propose to put up
private dwellings. Last spring when Mr. Cbas. T. Barney flrst
announced that the Donnelly tract was on the market, he stated
his intention of practically restricting tbe side streets to dwell¬
ings; but all these lots have now passed into the hands of apart¬
ment-house builders. Furthermore, ot the 300 or more sales
consummated in Manhattan and tte Bronx only eighteen are
private dwellings. Is Washington Heights to become a city of
flats and tenements and little else?
THE "Sun" has recently stated with great precision the dis¬
tinguishing characteristic of the current speculation in
vacant land oa Washington Heights and in the Bronx. "No
preceding lot speculation on a grand scale," It says, "has been
so directly associated with immediate building enterprise or
closely related to bnilding enterprise of a certain kind," This
is an extremely important fact and must be kept" constantly in
mind 'in estimating tbe results of the "boom." It is not a
"boom" at all in the old sense of the word. This country and
this city has passed through many periods of wild speculation
in land and unwholesome inflation of land values. The wildest
of these periods of local inflation oc urrcd early in tbe seventies
when the prices of lots on Sth ave were raised to a level which
was out of all proportions to their immediate value for im¬
provement; and which were only a little less than the level
attained thirty years later in 1902. At the same time lots on
Broadway, in the Dyckman tract were selling for about the
same prices that they have b en recently bringing. Tbe pay¬
ing of these prices for property, which would not be reached
for a generation in the natural grovr-th of the city was, of course,
mere inflation and could be expl3,'ned only by a popular craze
.lor real estate speculation. Since then there have been several
"boom;':" on Washington Heights, all of which were fruitless,
because tht," district was too inaccessible for immediate exploita¬
tion. Since tL'iose days, however, tbe whole business of deal¬
ing in vacant lotL- and selling them for improvement has be¬
come very much betM^r organized than it was. It has become
the occupation of a gr'iysjp of professional operators, who in
almost all the purchases they i-^iak? keep the possibility of early
and profltable improvement in rcii:^ci. They do not buy vacant
land witb tbe expectation of he A'- it indefinitely, but with
the purpose of turning it over to a b^ '" " within a few months.
Under such circumstances there is very littlt"' room for inflation
because values are based upon tbe known yield .p^ the property
when improved. It was the same way with ^^hc so-called
"boom" of two years ago in higl.-priced real, estate' in Man¬
hattan. Business men who heard of the large increi.^'se in
values argued by analogy that inflation was taking place, auT^^
expected that in a year or two the "boom" would be punctured
and values would drop. But in this ease as in that of the vacant
land, the prices were made for the most part by professional
operators, who knew very well what they were about, and who
did not pay more for a piece of pioperty than was warranted
by the income which could be derived from it when properly
improved. The existing market for real estate in this city ia
for better or worse a professional juarket. Genera! investors do
not like real estate as much as they used to, because the pro¬
fessional operators keep the proflts for themselves; but the lat¬
ter earn the proflts they make and they assuredl-y prevent any
considerable "inflation" of reai estate values.
or so , ^1
IT is doubtful whether the incorporation of a tunnel company
by the Lackawanna Railroad foreshadows the construction
ol still another connection underneath the river between New
Jersey and Connecticut. The counsel for the company states
tbat the tunnel will be built; but the project to build one may
be simply a move in the flght between the railroads and the
trolley tunnel company. As an outsider sees it the alternative
either of constructing or of not constructing a tunnel seems to
present grave diflculties for the railroad company. At present
the Lackawanna controls an extremely lucrative traffic to the
most populous New Jersey suburbs. This traflic is threatened
in some measure by tbe Pennsylvania tunnel; but it is much
more seriously threatened by the plans of the trolley company
^particularly if that company secures tremini both on Green¬
wich St. and Greeley Square. A ferry and train service such as
tbe Lackawanna now has could not efEectively compete with
express trains running into the heart of Manhattan. On the
other hand to build into Manhattan would cost an amount of
money which would hardly be v/arranted by the traffic of the
company; and it would be many years before the travel under
the river would justify any more tunnels than tbose already
planned. The balancing of the argument indicates, however,
that the Railroad Company will in tbe end be obliged to run its
trains under the River and it is probable that some arrange¬
ment will be made with the Er'e Railroad which will distribute
the expense between the two companies.
ACCORDING to the Mayor's account, given at the dinner
celebrating tbe opening of the Subway, the city is al¬
ready running uncomfortably close to the debt limit. The
actual margin at tbe present time is, indeed,over$100,000,000; but
60 per cent, of this amount is already pledged for the bridges and
other new construction now underway, and there remains only
about 540,000,000 for such imperative improvements as the
extension of the rapid transit system and an additional water
supply. No wonder the Mayor and the Comptroller have united