December 30. 1905





RECORD AND  OTTTDE





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BiTsii^Ess Alto Themes Of GeSeR.^!- ifiTER,EST.

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"Entered at the Post O.ffice at Netv York. N. Y.. as second-class iiiatUT."





Vol.  LXXVI,





DECEMBER 30. 1905.





No. 1972





INDBJX TO  DEPARTMENTS.
Advertising Section.

Page.                                                       Page,

Cement   ....................xxvii Law   .........................xiii

Clay  Products...............xxvi Machinery...................vi

Consulting   Engineers........vii   Metal  Work   .................xxiil

Contractors   and   Builders.......x   Quick   Job   Directory.........xxxi

Electrical Interests   .........vili  Real  Estaie.................xvi

Fireproofing..................ii  Roofers  & Roofing Materials.. ,v

Granite  ....................xxviii Stone   ....................xxviii

Heating   ....................xxiv Wood   Products   ..............xxx

Iroa  aad  Steel................xxii





IN observing the current business situation one caunot help
fearing that it is assuming a number of dangerous charac¬
teristics. Until recently the current activity and prosperity
were wholesome and were not accompanied by excessive in¬
creases in prices or by any signs of the kind of boom which
inevitably necessitates a sudden and disastrous reaction. But it
looks now as if the steel industry, for instance, was freeing
itself from the moderating influences which hitherto have kept
prices in check, and was getting into a condition similar to
that of 1902. It looks also as if the leading financiers were
again beginning to feel their oats, and were planning further
corporate combinations, which will largely increase the ex¬
isting supply of securities. Finally the speculative fever has
undeniably taken possession of "Wall Street, and it may well
be that wild and excited markets will prevail during the next
few months, until the excess brings its inevitable reaction.
There seems to be no danger that the reaction will come in
the near future, but the time is certainly not far distant when
money will be more valuable than securities, and when the
wise man will sell out and wait patiently until he can re¬
cover his stocks at a considerably lower level. Such a seller
may not get the very best prices for his speculative holdings,
but he will do well to take a substantial profit, and not to
risk being caught with many stocks when the decline begins.





THE current week brings to a close the most active real
estate and building year which the city of New York
has ever experienced. A full description and analysis of the
year's operations will be published in an early number of the
Record and Guide, but in the meantime we should like to call
attention to certain fundamental facts. There have been ap¬
proximately 35,000 conveyances recorded in the New York
County offices, and 42,000 in the Kings County offices. The
percentage of increase over the preceding year has been about
50 per cent, in Manhattan and the Bronx and about 35 per cent,
in Kings. Furthermore, it must be remembered that these in¬
creases, large as they are, follow upon a constant succession
of increases stretching over five years, the net result of which
is that real estate in this city is just about three times as
active as it was in 1900. It should also be noted that the
aggregate value of the Manhattan real estate transferred dur¬
ing the past year was not far from $875,000,000, and if the
value of Bronx propertry were added to tbis the total would be
considerably over ?1,000,000,000. The mortgage tables show
increases which are smaller, because of the discouraging effect
of the mortgage tax during the past six months; but heavily
as that tax has weighed upon the lending of money on real
estate, there has been about $500,000,000 loaned on Manhattan
and Bronx property, which is an enormous increase over the
total of the preceding year. The figui'es for projected build¬
ings tell the same story. In New York and Kings counties
buildings have been projected to cost not far from $250,000,000,
which is about 70 per cent, larger than the figures for the pre¬
ceding year, and the great mass of this money has been spent
upon the erection of new living accommodations, necessitated
by the growth of the city.   These are figures which only a few





years ago would have seemed inconceivably big; but it can
safely be said that this activity is the normal and inevitable
result of the growth of the city. It does not mean inflation in
prices; nor does it mean, except in some few sections, an excess
of speculative activity. It means a solid expansion in business
and a sufficient increase in population. Such a pace cannot be
indefinitely maintained, but ao far it has shown few unwhole¬
some symptoms.





THB question of the debt limit has been raised in its most
serious form by the rapid transit merger. The city
i,B confronted by the s,-.:!t that it cannot spend the money
qeeded for the subway extensions, nG matter- - how de¬
sirable it may be to do so, and the consequence is that varioiis-
methods are again being proposed to efEect an increase in the
municipal borrowing capacity. It is suggested, for instance,
that the assessed valuations of real estate be raised to a still
higher level, so as to provide an early increase of working
capital. But no such idea as this should be entertained for a
moment. Real estate in this city is assessed at the present
time quite as high as is safe. A 10 or 15-per ceut. margin should
be allowed to remain between the assessed and the selling
value, because the best real estate appraisers cannot pretend to
estimate more closely than that of the actual value of a piece
of property. If the general level were raised 10 per cent, it
would provoke the utmost confusion, because in that case
thousands of parcels would be assessed at more than their
selling value; and as this fact could be proved it would involve
the city iu endless contests with individual taxpayers. We are
glad to see that the Mayor has announced his opposition to
this proposal. Another suggestion is that the city should be
allowed to borrow 10 per cent, of the value of the real estate
owned by the city. This seems to be a moderate and reasonable
idea, and, as a matter of fact, it is defective because it is too
moderate. If the constitutional provision affecting the debt
Hmit is to be modified at alt, let it be modified in a radical and
effective manner. Adequate preparation should now be made
for all the probable future needs of the city. Any debt in¬
curred by the' city for the purchase of remunerative property,
such as subways, docks or lighting plants, should not be counted
as part of the debt included within the 10 per cent, limit; and
such preparation should be made, even if the use of the addi¬
tional borrowing power is not found to be necessary in the
present emergency. In this connection it is a fortunate thing
that Mr. Bird Coler will after -January 1st again have a seat
in the Board of Estimate and Apportionment. He is the gen¬
tleman who originally called attention to the absurdity of the
existing debt limit and to the effective and scientific manner of
modifying it. Now that he is again a city official, he may be
trusted to keep up the agitation for remedial action, until such
action is consummated.





MR. LAWSON PURDY is right in saying that the longer
the mortgage tax endures the more difflcult it will be
to repeal it, and the obvious inference is that no effort should
be spared during the coming session of the Legislature to effect
its repeal. Up to the present time it has been very decidedly a
failure as a producer of income; but, of course, its efficiency in
this respect will increase year by year, until at the end of flve
years it will yield such a large sum that it could not be re¬
pealed without dislocating the finances of the State. Hitherto,
however, the yield has been so small that its repeal would make
no difference, and a larger income could be raised immediately
from a mortgage recording tax. In the matter of the repeal, a
great deal depends upon the attitude of Governor Higgins, Not
only would it be impossible to pass a repealing bill over his
veto, but the Legislature obediently follows the Governor's lead
in matters of taxation, and the Governor's attitude, so far as it
has been made public, is not highly encouraging. The existing
mortgage tax is to a large extent his own personal measure,
and he will have to be pressed hard in order to submit to its
repeal. His message wiil doubtless contain his revised opinions
on tbe mortgage tax, and it will be interesting to observe how
far he can reconcile the actual effect of the tax with the argu¬
ments which he used in its favor last winter. The tax is not
olily being paid by the bori'ower, but in many instances it has
served to inciease the rate of interest by more than the
aniount of the tax. This fact can be pi'oved from the figures
published by the Record and Guide, and it substantiates the
claim of the opponents of the tax, that the impost is a
flagrant piece of double taxation. It remains to be seen
whether these arguments will have any effect upon the mind
of tbe Governor. It should be added that any legislative action
which may be taken on matters of taxation wil! depend upon
the financial position of the State, as revealed in the Governor's