December 26, 190S





RECORD   AND   GUIDE





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President,   CLINTON   W.   SWEET                         Treasurer,  F.  W.  DODGli:

Vice-Pres.  Se  Genl.  Mgr.,  H.  W.  DESMOND         Secretary,  F. T.  MILLER

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Copyrighted,   ISOS,   by   The   Record   &   Guide   Co.





Vol.   LXXXII.





DECEMBER  26,   190S.





No.  212S.





IN a recent issue. The Sun, by implication, takes the Record
and Guide to task for a statement to the effect that
"money is easy and is likely to remain so for an indefinite
period." It states that money has suddenly become very
much more difflcult to borrow on good security, and that the
chief reason for the recent decrease in real estate activity is
to be found in a sudden tightening of tlic purse strings. And
yet, in another column of the same issue of The Sun we find
the following statement, made by Mr. Frank Bailey, Vice-
President of the Title Guarantee & Trust Company: "We
find that the plethora of money awaiting investment is such
that we are able to again resume mortgage lending on a five
per cent, basis (in Brooklyn). We feel that this rate is
best both for borrower and lender. It shows that real estate
conditions have finally reached a normal basis." There is
every reason to accept Mr. Bailey's statement that real estate
conditions, particulariy in respect to the money market, have
finally reached a normal basis. It is true of course that
there has recently been a flurry in the call-money market,
and that this flurry not only partly accounts for a break
in stocks, but that it may have had some temporary effect
upon real estate loans. But there is every reason to believe
that the flurry is no more than momentary. It is due to
conditions that will have spent their force within a few weeks.
It does not imply any great increase in the actual employ¬
ment of capital in busines? development, and a consequent
return to the condition of strained credit which existed early
in 1907. Business is improving, but it is improving slowly,
and it is not making excessive demaiids upon the available
supply of loanable capital. Time money remains compara¬
tively easy; and it is, as the Record aud Guide said, likely
to continue easy for an indefinite period. When the season
of ordinary real estate activity begins in February, real
estate speculators and investors will not be embarrassed by
any difficulty in borrowing money on good security. Indi¬
cations are that general business wilt continue to improve
very slowly, and that new enterprises involving the use of
credit, the purchase of materials aud the employment of labor
that can 'be undertaken without excessive cost-capital will
probably continue to accumulate more rapidly than it is actu¬
ally needed during a large part of 1909. In this respect the
future of the money market depends largely upon the extent
to which the railroads resume the process of improvement,
interrupted by the panic. At the present time there are only
a few symptoms of any such resumption, and until they be¬
come more numerous the outlook for easy money will remain
excelleut.





•T" HE Board of Estimate has shown its usual good sense
■1 in authorizing the widening of the roadway of Forty-
second street as a step towards the alleviation of the traffic
congestion at the intersection of 42d street and Fifth avenue.
It is not to be expected for one instant that the wider roadway
will do away with the congestion at that point. But it will
iu all probability make it less acute for some years. As soon
as the roadways of the two intersecting streets are made
as wide as they can be, the same volume of traffic can cross
the congested point more quickly, and there will conse¬
quently take place less prolonged delays. How long the
alleviation will last cannot be accurately predicted, but it is
safe to say that in a few years the condition will become as
bad as it is at present, if not worse. There are many causes
contributing to the increase of the street traffic Qf New Yorii





City, the most Important of which is the constantly expand¬
ing use of motor-vehicles. J^arge as is the number of motor-
vehicles now on the streets, this will increase faster than
does the increase in population, because their purchasers are
able every year to get a better car for less money. The
number of taxicabs is also going to multiply, and in all
probability the horse-cabs, in order to meet this competition,
will have to install taximeters and will consequently grow in
public favor. The consequence will be that whatever the
delays at congested points now, they are bound to become
much worse within a few years; and the local authorities will
have to consider seriously how best they can be mitigated.
The reasons, however, which require a depression of Forty-
second street at the point of intersection with Fifth avenue
will always remain as valid as they are now. Another, but
very much more expensive, method would have been to lay
out a circle at the intersection of tbe two streets, largely
increasing the diameter of the crossing. In that way traffic
could have moved around the circle, in a constant stream,
which always flowed in the same direction, and which could
receive or discharge vehicles at each of the four entrances.
Seven or eight years ago such a plan would have been feas¬
ible, and the city, in case it had possessed the legal authority,
could have paid for the improvement by the condemnation
of more land than was actually needed, and its re-sale in
good-sized plots at an increased price. Such a plan is, how¬
ever, wholly out of the question now. The three corners
needed are among the most valuable in the city, and could
not be purchased for less than many millions, while the
existing location of the uew Central Public Library consti¬
tutes an insuperable obstacle. The only way eventually of
solving the problem will be by doing something to divert the
traf&c and the accomplishment of anything effectual in that
respect cannot be seriously considered in the existing con¬
dition of the municipal finances. In the meantime the road¬
way of Thirty-fourth street, between Madison and Seventh
avenues, should be widened to the same extent as Forty-sec¬
ond street and a similar improvement should be made ou
Twenty-third street, between Fourth and Eighth avenues.
The need for more traffic room on these other streets is al¬
most as great as it is in the case of Forty-second street.





IN his recent address to the City Cltib, Mr. William M. Ivins
took the gloomiest view that has yet been published of
the city's financial position. The most novel part of his
analysis of the existing situation referred to the debt limit.
Mr. Ivins calculates that the borrowing capacity of the city
does not at present amount to more than $8,000,000, and that
on July 1st next it will not be increased by more than $15,-
000,000, which means that during the next eighteen months
the utmost which the city can spend upon improvements of
all kinds is $23,000,000, plus whatever the increase in the
Sinking Fund may amount to during that period. If these
figures are correct, it means that the process of improve¬
ment must cease during the period named. All the money
which the city can legally borrow, and more, will be ab¬
sorbed by.the cost of completing improvements now in the
course of constrtiction, and new enterprises, no matter how
necessary they may be, cannot be undertaken. If such proves
to be the case, the consequences will be disastrous, and it
will be particularly disastrous for the real estate interests.
The policy of improvement, which has cost so much of late
years, may have been attended by extravagance and it may
have been unnecessary in some details, but it has been dic¬
tated in genera! by the necessities of the city's growth in
business and population. It can be curtailed, hereafter, with¬
out any very costly consequences, but it cannot be entirely
stopped. If Mr. Ivins' calculations are correct, all debt in- .
curred for self-supporting improvement should unquestion¬
ably be excluded from the amount estimated as part of the
ten per cent, margin. In this way the city could obtain
some leeway, aud presumably, after al! the recent ventilation
of the financial condition of New York, the leeway would be
prudently and economically used. It should be added, of
course, that Mr. Ivins' calculations may not prove to be exact.
In all probability the increase in the assessed valuation of
real estate will not amount to more than $150,000,000^
which would be somewhere near the value of the improve¬
ments completed during that period and now taxable for the
first time. But his estimate of the debt margin differs rad¬
ically from that of Comptroller Metz; and presumably the
Comptroller's figures are more nearly correct. In any event
the whole question will be settled within a few weeks; and
ff Mr. Ivins* calculations should prove to be accurate, legis¬
lative action looking towards a constitutional amendment Is
Imperative.