June ID, 1905





RECORD AND   GUIDE





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Copyrieht by the Eeal Eatate Record and Builders' Gclde Compiiny.

■Vol. LXXV.                       JUNE :0, 190.3.                     No, 194.X

INDEX  TO   DEPARTMENTS.





CeraenL.............

Clay   ProducLs    ........

Contractors and  Builders

Fireprooflng    ..........

Granile   ..............

Iron and Steel.........





Machinery , .
Metal Work.,
Real   Estate   .





■which has of late somewhat subsided. The causes which
aroused that speculation have lost none of their force. There
continues to be an undersupply of new residential accommo¬
dation of all kinds; and the current construction of new flats
and tenements, large as it is, is not large enough to do more
than supply the current increase in the population of New York,
(t is pi-ohahle that about $80,000,000 will be invested in new
tenements in Manhattan and the Bronx in 1905, and in 190G
there are good reasons to anticipate that the amotm't will be
even larger. It is entirely possible, also, that the latter part
of this year and 'the whole of next year will witness some re¬
vival of the speculative building of private residences. The
f.:xisting demand for dwellings is such as to encourage these en¬
terprises, and the few builders who have had brick private
houses on Washington Heights and in fne Bronx for sale have
come out very well and ave beginning new operations. We do
no't believe, however, that at most more than a few million
dollars will find its way into this class of construction. The
general movement continues to be overwhelmingly in favor of
tenements and flats; and the number of plans filed for new
construction of this kind on Washington Heights is becoming
larger every week, and will aggregate between $20,000,000 and
$25,000,000 in the course of the year.





Wood   Products





SPECULATION in stocks still refuses to show any particu¬
lar animation; and there is no good reason why it should.
Investors naturally do not care to buy even good railroad
stocks on a four per cent basis; and until there is an assurance
of larger earnings or increased dividends they naturally hold
aloof. Moreover, it is noticeable that the stock market does
not receive any artificial stimulus, as it did during 1901 and 1902,
In those years one large consolidation followed another; and
the big railroad companies, when they were not absorbing com¬
peting and connecting lines, were purchasing large amounts of
stock in them, so as to secure "community of interest," It was
a period of organiaation and of the introduction of new
and fruitful ideas into the management aod operation of rail¬
road and industrial companies. Nothing corresponding to this
has been taking place recently. The Sherman anti-trust law,
the popular dislike of large combinations, and the doubtful suc¬
cess of some of the largest consolidations, have all served to
prevent a renewed application of the organization idea, while
so far as "community of interest" is concerned, that principle
has fallen into even greater disfavor. It depended essentially
upon the notion that the large divisions of the railway map of
the United States were fixed and that it was possible for the
companies and the groups of capitalists who controlled each of
these divisions, to cooperate for the purpose of securing a fair
and permanent distribution of trathc. The Northern Pacific
fight was the flrst indication that any community of interest
among the large railroad systems was still far from complete;
and since then the aggressive policy of the different Gould rail¬
roads and several similar causes of difference have made any gen¬
eral commimity of interest among the various railroad systems
seem still more remote. Indeed oue of the dangerous contingencies
of the present situation is the possibility that a period of active
warfare among the large railway companies and financial
groups may succeed the existing condition of armed peace-
Just how serious the danger is, only an insider can judge; but
at any rate, so long as the existing uncertainty lasts the stock
, market must depend for any stimulation of activity or increase
in prices upon a prospective increase in actual values. The
investing public does not want stocks wbich pay four per cent,
or less, and at present there is no chance of artificially
awakening his interest.





THERE are no signs of any noticeable abatement in the
volume of real estate transactions. The number of
transfers recorded during the flrst week in Jime in the New
York County oflices were 944, against GTO for the corresponding
week last year, an increase of about 40 per cent. From January
1st to June 1st, a period of five months, the total number 01
transfers were almost 7,000 gi-eater than they were during the
corresponding flve months of 1904, the percentage of increasa
being about 65, while the flgures for IVIay alone, indicate about
the same rate of increase. Business will not maintain its pres¬
ent volume very much longer; but there is no reason to sup¬
pose that the total number of transactions will not continue to
be about fifty per cent larger than they were during the same
months of 1904, No reason can be found for any diminution of
activity. On the contrary it looks very much as if iu the fall
there would be a revival pf the  speculation  in vacant  land,





'T^HE long memorandum which the Governor attached to
■■■ bis signature of the Mortgage Tax bill shows how much
self-persuasion he needed to confirm his decision to approve the
measure; and the arguments he uses are a curious illustration
of the way in which a man can draw a wrong conclusion from
sound premises. Of course, the taxation of mortgages under
the general property tax has been a crying injustice, which
would have been done away with long since in any state which
was really trying to make its system of taxation eqnitable aud
efficient. But the taxation of mortgages at the rate of one-
half of one per cent, instead of the rate of two per cent,
or less, merely universalizes an act of injustice which waa
formerly occasional and temporary. It was undoubtedly out¬
rageous to force, trustees to surrender to the state anywhere
from one-third to one-half the income derived from a mort¬
gage; but this meant, of course, that the money would be called
in as soon as the mortgage expired. Now, however, the state
takes less of the income, but leaves no method of escape. The
tax, instead of being paid by the lender, will necessarily be
paid by the borrower, and will become a tax upon business.
Every argument which the Governor can urge in its favor ap¬
plies with much greater force either to the entire exemption of
mortgages from taxation or at least to a mortgage recording
tax. However, there is no use crying over spilt milk. The
mortgage tax is on the statute books, and the question is what
its effect will be. Governor Higgins evidently believes that it
will encourage the investment of money in mortgages to such an
extent that it will lower the prevailing rates of interest on
mortgages. In some few instances such may be the case; but
we do not believe that on the whole the borrower -will have
any escape considering the necessary disadvantages of mort¬
gages as an investment, we do not believe that the money
loaned hitherto at flve per cent v.'ill hereafter be loaned at four
and one-half per cent, or that the money loaned at four and one-
half per cent will hereafter be loaned at four per cent. The
money so loaned is worth all that it brings at present. As for
the money loaned at six per cent., which at present constitutes
almost one-half of the money loaned in this city, the tax on
these mortgages will inevitably be paid by the borrower. Even
at present he almost always has to pay a bonus in order to get
his money; and hereafter the bonus will be still biggsr.
Doubtless the proflts derived from building operations will stand
this additional drain, but that does not affect either the injustice
or the inexpediency of the tax.





THE mortgage tax is on the statute books, but that is no
reason why it should remain there. It will undoubtedly
be extremely unpopular; and its unpopularity will provide an
excellent opportunity to arouse a more general interest in
proper and just methods of taxation. For this reason it is en¬
couraging to note that the Allied Real Estate Interests pro¬
pose to maintain a permanent organization, and work for the
repeal of the tax. It is only by some such means that New York
can hope to receive fair treatment in matters of taxation from
Albany; and the real estate and building interest will in a
month be suffering from mortgage taxation, because it has ne¬
glected in the past to work assiduously for just and efficient
methods and principles of taxation. It has had uo organization
sufiicient for the purpose, and no appreciation of the danger
it has been running iu allowing the state policy in matters of
taxation to be dictated by the needs pf Republican party politics