April iS, 1908





RECORD  AND  GUIDE





699









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Copyrighted.




1908,   by




The




Record




&




Guide




Co,















Vol.




LXXXl.




APRIL




IS,




190S.



















No.




2092.





THERE are fewer indications than there were a few
■weeks ago of a general industrial revival, but there
are also more indications that the business community is
beginning to profit by tbe bitter but salutary dose of busi¬
ness depression. A prolonged period of prosperity encour¬
ages not only extravagance of personal expenditures, but a
somewhat easy extravagance of business methods. A manu¬
facturer who finds it difficult to l^eep abreast of his orders
is not prompted to look closely into the economy of his busi¬
ness organization. It is cheaper for tbe time being to de¬
vote all his energy to increasing his product, even if tbe cost
of production becomes unpleasantly high. He can afford to
postpone any strenuous attempt to make his methods of pro¬
duction and sale as economical as possible until tbe coming
of a period of lower prices and fewer orders. It is tbis process
o^ business reorganization which is now taking place; and
it must be allowed to run its course. Tbe railroads are be¬
ginning to succeed in diminishing their operating expenses
in something like the same proportion as the decrease in
gross earnings, and all large industries are adopting similar
measures to accomplish similar results. Even though there
is no general reduction in wages, tbe labor cost of the most
important services and commodities is being reduced. The
less competent employees are being discharged, and tbe fear
of a similar fate stimulates their more fortunate or able
brethren to renewed exertions. All persons, machines and
methods are being put to a much severer test than there can
be in a period of prosperity; and tbey must prove their com¬
petence or else be thrown into the scrapheap. A process of
this kind cannot be completed in a day, and it is not de¬
sirable that it should be. Occasional periods of business
depression are as necessary to the health of tbe business or¬
ganism as tonics and purges are to tbe health of the human
body. No doubt neither men nor business communities
would need such drastic medicine in ease they did not abuse
themselves during tbeir periods of health and abundance.
Tbe medicine is only necessary in order to cleanse the
system from the effects of excess and to renew its vitality.
But if any industrial community ever needed such medicine
it was tbe American business community of 1906 and 1907.
Its health bad not been permanently undermined by its long
period of prosperity, but it was certainly suffering from too
much blood and too much flesh; and it needed some whole¬
some bleeding and some rigorous training. Everything in¬
dicates that it is getting a large allowance of just what it
needs, and that it is already showing symptoms of better
health.

.-------------«-------------

ONE of the most hopeful developments in the rapid tran¬
sit situation has been the recent rise in the price of
tbe local traction shares. This rise in price bas not been
sufficient, of course, to restore tbe credit of the Interborough-
Metropolitan Company, but so far as it has gone it bas been
encouraging and is indicative of a real improvement in the
financial position and prospects of the local traction corpora¬
tions. The situation of tbe Interborough Company itself
would, of course, be exceptionally strong in case the merger
had never taken place, and tbe best possible result of the
New York City Railway receivership would be a dissolutlor
of tbe merger. For in that event the Interborough Company
would be in a position to build additional Manbattan subways
with its own credit. Even, however, if the merger cannot
be dissolved, the Tnterborougb-Metropolitan Company may
be strong enough at the expiration of another year again U





become an actual factor in the gradual construction of an
enlarged subway system. Under the management of the re¬
ceivers the earnings of the street railway cars are being aug¬
mented, and in the course of time can be still further
augmented. Probably they will never be sufflcient to meet
tbe obligations of tbe New York City Railway Company, bul
they should be sufflcient to give a considerable value to the
street railway shares owned by the Interborough-Metro-
politan Company. It is to be hoped that the improvement will
proceed rapidly enough to justify tbe early announcement
of some scheme of reorganization. As the Record and Guide
has frequently pointed out, tbis is a matter which concerns
not merely the owners of the securities of the several local
traction corporations, but tbe traveling public of the whole
city. Whether or not the merger of the street railway com¬
pany witb the Subway Company was desirable in the public
interest, there can be no doubt that the subway system of
New York should, if possible, be leased and operated by one
corporation. Several independent subway companies oper¬
ating lines wbich were not connected one witb another would
give the city a service much less convenient and much more
expensive than could a single company operating one con¬
necting subway system. It wouid consequently be peculiarly
unfortunate in case tbe Interborough Company were unable,
because of its defective credit, to become an actual bidder
for any new Manhattan subways. It looks now as if such
additions to the underground system would be built by private
capital, and provided it can raise the necessary money, the
Interborough Company can alford to offer the city a better
operating contract than can a new and independent company.
Any further improvement in the value of the Interborough-
Metropolitan securities will consequently remove one of the
gravest existing drawbacks to tbe construction under most
satisfactory  conditions of  new  underground  railroads.





NO question of discretion was involved in the case which
the Appellate Division of the First Department decided
this week in favor of tbe Tenement House Commissioner and
the construction be had placed on a certain provision of law.
The relators insisted, according to the opinion handed down,
tbat  upon   the  facts  recited  in  the  Interlocutory  writ  they
were entitled as a matter of strict legal right to tbe approval
of tbeir plans and specifications for the alteration of a row
of houses which bad been erected and completed according to
other plans which had been approved by the department.  This
is not, therefore, a case of being permitted to build in violation
of the law and disciplined for it afterwards, because the pur¬
pose of tbe legal proceeding was to compel the commissioner
to approve plans and specifications for tbe alteration of exist¬
ing cellar rooms so that tbey could be occupied by janitors
and   their  families.    The  first  objection  which  the  commis¬
sioner made to tbe plans was tbat the ceiling of the rooms are
only  two   feet  above  the  curb   of  tbe  street,   whereas  they
should be four feet and six inches above tbat level, because
the houses were erected since the passage of the Tenement
House act, and hence the application of the owner was gov¬
erned by Section  91, subdiv.   3, which relates to rooms in
basements and when tbey may be altered so as to be occu¬
pied   for living  purposes.     This section  provides that "tbe
ceiling of such rooms shall be at least four feet and six inches
above the surface of the street OR ground outside of and ad¬
joining the same."    The owners' contention was that the re¬
quirements of the statute would be met in tbe case of the
rooms which tbey desire to convert into dwelling-rooms, be¬
cause their ceilings arq more than this distance above tbe
surface of a sunken court;  but the judges of the Appellate
Division   unanimously   held   that  the  real  intention  of  the
statute was tbat in all houses thereafter erected at least one-
half of the height of the basement rooms should be above
the curb level, and tbat tbe words "and" and "or" when used
in a statute are convertible as the sense may require.    Tbe
evident desire of tbe owners was to convert into living apart¬
ments wbat is virtually a cellar, notwithstanding the sunken
court;   and, taking this view the judges  found  themselves
unable to accede to tlie construction contended for by the
relators, whose ceilings are but two feet above the level of
all the adjacent streets, when they should be four and a half.
Hence the present decision contains nothing extraordinary or
radically different from previous interpretations of the statute
and rulings of the department.    It was hardly to be expected
that the courts would finally permit an owner to excavate a
space- many feel below the level of tbe adjacent street and, by
creating  an  artificial  surface,  so evade  a  law whose object
was to ensure ventilation and punshioe for basement apart¬
ments.