February 23, 1507





RECORD  AND   GUIDE





395







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Bifsit^ESs Alto Themes of GeiJersI IfftEHEST.

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Vol. LXXIX.





FEBRUARY 23, 1907.





No. 2032.





INDEX  TO  DEPARTMENTS.
Advertising Section,

Page                                                Page

Cement   ....................xvii Lumber    ....................xxii

Consulting  Engineers   ........viii  Macliiuerj'   ....................v

Clay   Products   ..................x Metal   Work   ...............xvi

Contractors   and   Builders......iii Quick  Job   Directory.........sxiii

Electrical   Interests   ...........vi Real  Estate   ...................xl

Fireproofing   ...................ii Roofers & Rooflng Materials.. .xs

Granite   ...................xviii Stone....................xviii

Iron and StesI...............ix Wood Products   .............xxii

THERE is still gloom in Wall Street this weeli, and at the
moment it is impeuetrahle. Fear of everything is still
further increased by what is a pructical triple holiday, of which
operators are always afraid, because something untoward may
happen. Speculation there is none. Wall Street is poor, and is
sitting up counting its losses of the past twelve months, during
which time stocks in the main steadily declined, whiie the bull
conditions steadily increased. Nothing like it has ever before
been known, and it is small wonder that people hesitate to pre¬
dict the outcome, and hold themselves ready to believe any fore¬
cast offered to them. Of course, it is just out of such conditions
that past bull markets have started, and the great bourses the
world over may have the courage to shake off this state of mind
at any day^—for that is all that it is, a state of mind. The
fundamental conditions are sound and unshaken in their sound¬
ness, and presently, the pendulum should sway as far as it has
gone in the other direction. As matters stand it would appear
that good stocks are a purchase at going prices, particularly
those of the standard railroads, because, measured by earnings,
the intrinsic value of the actual properties they represent have
never before been as cheap even at their cheapest in the past.
While in this column we give the actual situation, it may not
be out of place to mention some of the alleged immediate causes
of the irregularity in prices of certain stocks. In most cases
they are explanations that do not explain. The heavy selling of
Union Pacific was said to be the result of diiferenees of opinion
as to the effect of what would be Mr. Harriman's statement
before the Interstate Commerce Commission. Yet Union Pacific
at its present quotation is practically a 6 per cent, stock—cer¬
tainly a good rate of interest. The granger stocks and steel, it
is said, are being bought in London and other European centers;
but still these issues do not advance. It is also asserted that
■some of that illusory element known as "the public" is making
secret purchases of stocks through banks, thus enabling some
insiders to liquidate considerably. What, however, most con¬
cerns real estate and building interests is the money market.
There has been but little change this week, though the call loan
rate again touched ^7z per cent. A significant utterance of
James J. Hill may here be given for what it is worth: "I teil
you that the railroad facilities of the country have been para¬
lyzed by the growth of business. All the flgures show it, and
they cannot be answered. Not alone more cars, but more tracks
and more terminals.   This is what is needed."





WITH all its apparent solicitude for business, Congress
persistently neglects one necessary subject of legis¬
lation reform which, if properly treated, would be of the ut¬
most beneflt to the business interests of the country. We
refer, of course, to a change in the national currency, which
would permit it to eiipand when business demands its expan¬
sion and contract when such a large volume of currency is
no longer necessary. It is an extraordinary fact that busi¬
ness men do not seem to realize the peculiar importance of
their interests in this matter. They allow a currency sys¬
tem to exist which encourages the rates on call money to
vary in one year between two and fifty per cent., and which
dees them far more harm than it does to the banks. The
banks, of course, profit from the high rates at which they





can lend their mouey, and they are not, consequently, very
eager to secure the passage of a currency reform bill. They
doubtless realize that they run the risk of a panic; but they
would rather assume that risk than forego the benefit which
they derive from high interest rates in times of stringency.
But business men have both to pay the high interest rates
and run the grave risks which would befall all but the
strongest of them from the violent contraction of credit
which accompanies a panic. And among the business men
who suffer most are real estate operators and builders. In
times of stringency, such as the present, it is real estate
loans whicli are most difficult to secure; and while under any
system there would, of eourse, be periods in which interest
rates were higher than others, the extreme scarcity which
now lasts for years at a time, would be impossible. Orga¬
nizations of business men all over the country should take
the matter out of the hands of the banks, aud agitate for a
plan ot currency reform whicli would really cure the exist¬
ing evil.





EVERY plan proposed by the banks, merely arranges for
an expansion of bank notes in times of stringency,
without providing for any corresponding increase iu the re¬
serves which woiild safeguard the issue of such notes, and
without providing for any diminution in the volume of exist¬
ing bank notes di ring periods of easy money. The plain
fact is that the con.litions under which the existing national
bank notes are iss.ied make a flexible currency impossible,
and that as long a;i these iiational bank notes constitute the
only kind or the 1. ulk of note issue, no permanent cure is
possible. A national bank circulates its notes, not because
there is a special demand for such circulation, but because
the price of government bonds enables it to make a profit
by so doing. The consequence is that these notes are not
increased to any (onsiderable extent when they are need¬
ed. Neither are tb-ey diminished when they are not needed.
Hence, periods of pxtreme stringency, which place a heavy
burden on all business transactions, requiring the iise of
credit alternate with periods of an over-plentiful supply
which encourages unwholesome speculation. A radically
different method of issuing notes is consequently a condition
of a wholesome an.l flexible currency system, and it is just
such a method whit'h both Congress and the banks are loth
to introduce. Congress avoids the matter because the exist¬
ing bond-secured circulation makes the price of government'
bonds artificially low aud any change would necessarfly mean
a fall in the price cf United States securities. The national
banks are equally reluctant to deal with the matter, because
they would be the chief losers from such a fall in the price
of government bonds. It is safe to say that nothing will be
done until business men insist upon some tboi'ough-going
remedial action.





ANY one who has ever had experience in investigating
the cause of a railroad disaster in which passengers
have been killed and injured is aware of the difflculty of
eliciting true facts bearing upon the responsibilities of the
case. If the railroad officers know, they won't tell, and
sometimes they don't care to know. A number of possible
causes have been suggested for the Bronx Park derailment
of last Saturday night, but in all probability it was' simply
due to the fact (hat the Harlem Iliver division, or, to say the
least, the curve at the Woodlawu Avenue bridge, was not
fitted or adapted to the combination of heavy weights and
high flights of speed as represented by the new electric en¬
gines. (1) The train was late and by impartial testimony
w:tG at a speed never seen on that stretch of road under
steam power. (2) Any one who will look at the curve will
see that the tracks are almost flat and are not banked suffi¬
ciently for a 90-ton engine- running a mile-a-minute, or more.
(3) The driver had never been obliged to stiffen his train
on this curve when running a steam locomotive, no matter
how high the speed, and either from force of habit or non-
realization of the limitations of trackage, he hit the curve
with brakes off and the full power of his giant motor turned
ou, with the result that eithei- the engine mounted the rail,
or the rail gave way—probably both.





—No agreement has been reached between the city's Bureau
of Franchises and fht.' City Interborough Co. as to the franchises
for new surface roads and extensions of existing lines in the
Bronx. Engineer Nichols, of the Franchise Bureau, recom¬
mends the running- of surface cars Irom the Bronx across the
Willis av bridge and the bridges at loSth -st and Madison av,
at 149th st, and at 207th st for sufflcient distances in Mac-
hattan to make direct connection with the subway, surface tintf
elevateil system's.