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May 30, 1908
RECORD AND GUIDE
1003
BtfsBteBC«btHE«KoF'GEjto^V iKreiijsT^
WtlCB PER YEAR IN ADVANCE EIGHT DOLLARS
Communications should ba addressed to
C. W. SWEET
fablUfitd EVerg Satardaff
By THE RECORD AND GUIDB CO.
ffeatdent, CLINTON W. SWEET Treasurer, F. W. DODGE
Tlo»-Pres. & Genl. Mgr., H. W. DESMOND Secretary, F. T. MILLER
Nob. 11 to IB Eaat 24th Street, New Yort City
(Telephone, Madison Square, 4430 to -4433.)
"Entered al the Post Offict *t Hoc York, N. T., us second-class mader."
Copyrighted, 1908, by Tha Record *: Guide Co.
Vol, LXXXL
MAT 30, 1908.
No, 209S.
THE more cheerful attitude of Wall Street towards the
business situation Is beginning to have a good effect
generally. The credit of the several railroad companies,
whicli have needed ' to raise money, has strengthened,
and tfiey have provided, not only for immediate ne¬
cessities, but even for a resumption of certain sus¬
pended improvements. Milla are beginning to resume all
over the country, and business men in all departments of
trade are beginning to regard the future with more confi¬
dence. No doubt a good many mouths must elapse before
this better feeling has its full effect, iDut in case no disaster
overtakes the crops, there is every reason to suppose that the
summer will witness a slow but sure process of recovery. It
is such a process of recovery -which the business of the coun¬
try needs. Any sudden and violent revival of business would
necessarily be temporary in its nature and unwholesome in
its effects. In writing and talking about the existing de¬
pression, both the newspapers aud many business men too
often forget that some such depression was necessary for the
permanent industrial well-being of the country. Business
had become disorganized by the effects of too much prosper¬
ity. A period of quiet was necessary in order that econ¬
omies might be effected, operating and manufacturing ex¬
penses diminished, the efficiency of labor increased, and
blind capital accumulated. A sudden revival of prosperity
would Interfere with the proper achievement of al! of these
essential tasks, whereas a gradual resumption of business
activity extending over a couple of years would permit the
necessary re-organization to be accomplished and would lay
the foundation for a longer subsequent period of business
activity.
THE veto by Governor Hughes of the amendments to the
Rapid Transit Act contained in the Robinson bill kills
any expectation of the early construction of Manhattan sub¬
ways. Even if private corporations could be induced to as¬
sume an operating contract for the term provided for in the
existing law, the city cannot possibly appropriate any money
for the purpose unless some drastic means are adopted of
increasing the assessed valuation of real estate. The veto
consequently means a long delay in the beginning of any
new subway construction, and Governor Hughes has assumed
a severe responsibility in refusing his assent, to the Robinson
amendment. Neither are the reasons whereby he defends
his actiou any sufficient excuse therefor. Those reasons can
be grouped under two heads. In the first place, he does not
believe tbat private capital could be induced even by the
offer of a fifty-year franchise to come immediately to the
rescue of the city. This, however, is only his opinion, and
it does not seem probable that he is right. At the end of
four years of operation the existing subway will be earning
IJIO.OOO.OOO gross, $5,500,000 net, and carrying 200,000,000
passengers a year. Surely after such a showing it looks as if
capitalists who would not risk their money in an enterprise
which promised just as well would have lost their sense of
a "good thing." It is true that the fixed charges on the cost
of construction would be larger for a new subway than it is
for the one now existing, both because a higher interest rate
would have to be paid on fhe bonds, and because the cost of
construction per mile would be larger. But on the other
hand, as the report of Mr, Bion J. Arnold shows, a new sub¬
way could be made capable of carrying a much denser traffic
—a traffic so dense as more than to counterbalance the
higher fixed charges. In any event, however, the attempt to
secure the immediate cooperation of private capital was
worth while and could have done no harm in case it failed.
Just here, however, comes in the Governor's second reason.
"The city," said Governor Hughes, "should not lose control
over its highways for rapid transit purposes for such a pe¬
riod. Any one who reflects upon what the city was fifty
years ago, and upou what it is likely to become in the course
of the next fifty years must realize this." The Record and
Guide believes this second reason to be much more valid
than the first. In fact, just in so far as it is valid, it abso¬
lutely kills the force of his contention that private capital
would not be tempted by a fifty-year franchise. A franchise
which is too valuable to alienate for so long a term would
also be too valuable not to be snapped up by a private cor¬
poration, and the really practical question is whether tho
city would lose more by a long delay in the construction of
an improved transit system than it would by the surrender
of the franchise for a longer term. We believe tbat the loss
of time, the discomfort and the burden upon the business
efficiency of the city due to an indefinite delay in rapid
transit construction will cost the city more than it will gain
because of the shorter term for which the franchises will be
surrendered.)
WHETHER Mr. Hughes was or was not justifled in his
veto it is a fact that the attempt to secure the co¬
operation of private capital in subway construction has
failed, and that, furthermore, this failure must be considered
final. Even if New York elects a new Governor next fall,
it will scarcely be worth while to renew the attempt, because
relief from another source will then be near at hand. The
L'egislature has passed a concurrent resolution for an amend¬
ment to the Constitution, providing that indebtedness in¬
curred for rapid transit improvements shall not, under speci¬
fied conditions, be considered iu estimating the debt limit, and
the efforts of everybody interested in rapid transit should
uow be concentrated upon the passage of a similar resolution
at the next session of the Legislature, and its popular ap¬
proval one year from the coming fall. The worst impedi¬
ment to an adequate system of underground rapid transit
will then have disappeared; and it will he possible to plan a
subway system like the one lu Paris, which will be really
comprehensive and which can be constructed gradually, but
without any serious delays or interruptions. Moreover, the
public opinion of the city must understand the consequence
of constructing au improved transit system under the terms
of the existing law. It means, probably, that the city will
be obliged to bear the expense of not only constructing the
new subways, but also of providing a certain amount of
equipment. No doubt at the end of another two years the
credit of the Interborough Co, may be so restored and the
obvious advantage even of a short lease may have become so
great, that it will be ready to equip extensions to the present
subway in return for a lease of twenty years with one
renewal of fifteen years, but after the failure of a year ago
to secure bidders under the legal terms, it would be foolish
to count upon such a contingency. As long as it will offer
only'a short lease, the city must be prepared to put up more
money in order to secure a tenant for its subways. It must
even be prepared, if necessary, to provide all the equipment,
or to operate the subway by its own employes. It is now
definitely committed to a policy of municipal construction
and short leases, and it must pursue such a policy in a con¬
sistent and thorough-going way. It wilt suffer grave losses
because of its having been obliged to persist iu this policy
after it had failed to be immediately successful; and the one
way of partially remunerating itself for these losses will be
to obtain every advantage it can from a subway system
leased only for a short term. In constructing subways and
leasing for a period of at the outside only thirty-five years
it will be creating for itself an asset of enormous future
value. The next two years should be passed in carefully
considering the routes which ought to be Included in a com¬
prehensive subway system, their order of construction, and
the probable assistance which can be obtained from private
capital.
ANOTHER LANDMARK DOOMED.—The old-fashioned 4-
sly brownstone dwelling 405'4th av is going to be altered beyond
recognition. This house is situated 2.^.5 feet north of 2Sth st
and is going to be converted into an ofhce building, with a store
on the ground floor, and bachelor apartments upstairs. This
property is centrally located, there being a subway station
almost directly in front of the door, and an elevated raiload
station on 3d av and 2Sth st.