November 5, rgiO.





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Vol.  LXXXVL





NOVEMBER 5, 1910.





No. 2225





THE BUDGET, THE SUBWAYS AND REAL
ESTATE.

THE three matters which contiiiue to excite the most lively
interest on the part of the property owners of New
York City are (1) the Budget for the coming year, (2) the
prospects for additional subwaj' constructions and (3) the
real estate and building outlook for 1911. It must be ad¬
mitted also that in respect to no one of these matters of vitai
interest have the recent developments been of an encourag¬
ing nature. According to the latest information, the Budget,
instead of being Increased over the current year by the sum
oC about $8,000,000 will be increased by the sum of over
1^10,000,000, which means a substantial increase in our bills.
As the days go by the subway situation l)ecomes more, rather
than less, crowded, and the criticism of the Public Service
Commission more rather than less severe. These two facts
are in themselves sufficient to diminish real estate and
building activities, but they do not stand alone in their
tendency to discourage active operations. The condition of
the money market, the attitude of the large purchasers of
mortgages, and the general results of the fall rental season
all contribute to the impression that, unless the situation
undergoes a change, the outloolv for 1911 favors a diminished
rather than an increased volume of real estate and building
business in and about the Greater New York,





THE attitude of New York property-owners towards the
Budget was admirably summed up by Mr. Michael J.
Horan, counsel for the United Real Estate Owners of New
York at the hearing on the Budget. He pointed out that the
present administration was pledged to economy, aud that ex¬
pectations had been held out to property-owners that their
taxes, even if they were uot reduced, at least would not be
increased. But in spite of these pledges, in spite of a sup¬
posed improvement in the methods of Budget making, and in
spite of a great deal of newspaper talk about economies
which had been actually effected, the net result would be a
substantial increase, not merely in the amount of money to
be raised by taxation, but in the tax bills. It is no wonder
that the average property-owner whose real estate has barely
advanced in value during the past year is disgusted and ag¬
grieved. Since the Budget hearing about $2,500,000 has
been added to the totals; and the total appropriations for the
coming year will reach the enormous total of $174,000,000.
The resulting increase in taxation, following on the increases
of the past three years will have augmented the tax bill of
the average New York property-owner by more than one-
third, only a small part of which has been shifted to tenants;
and it becomes literally true, as Mr. Horan says, that in pro¬
testing against these successive increases the real estate
owners of New York are becoming engaged in a contest for
sel f-preservation.





JUST because the crisis is so serious, nothing is to be gained
by indiscriminate abuse of the present administration, or
by loud demands for economy without any speciflc suggestion
as to the manner in which economy is to be brought about.
There is undoubtedly room for a difference of opinion as to
the make-up of the aew Budget. Many property owners will
believe that in making such a huge appropriation towards
meeting the past deficiencies in taxation, an appropriation of
no less than $10,000,000, the Board of Estimate has imposed
an   unnecessarily  heavy  burden  upon   tbe  tax  bills   for  the





coming year; and they will naturally wonder whether the
accelerated pace at which the Board is paying these deficien¬
cies may not be due to an appreciation of the political ad¬
vantage of being able to reduce the Budget just previous to
the next raunicipal election. In another year these deficien¬
cies w'ill he paid, and a large amount of money now raised by
taxation can be deducted from the totals. This is, however,
only a matter of detail. The debts had been incurred in the
past by vicious financial methods and they have got to bo
paid. Whether the Board of Estimate was wise or not in
making such a large appropriation in any one year towards
the settling of these debts every candid property owner
should recognize that the Board of Estimate has desired to
economize and to place the finances of the city on a sound
basis. It is perfectly obvious that the conditions which
have resulted year after year in an increased Budget, are in
large measure beyond the control of the Board of Estimate
as constituted at present, and that nothing is to he gained
by personal and partisan denunciations of a group of raen
who are public spirited officials. The condition is too serious,
the crisis is too acute and dangerous for the use of such
methods. There is only one thing to be done. The real
estate and business interests of New York must cooperate
with the administration in taking stock of the situation and
in reaching some definite conclusion as to the way in which
this constant and deplorable increase in taxation can be
checked. A commission of paid experts should be appointed
for that purpose, and in case such a commission cannot
obtain necessary powers of investigation frora the local
government, legislation to that end should be obtained at
Albany next winter. There is no other method of tackling
the problem adequately. We may all have our individual
opinions as to the way in which the increase in the Budget
can be checked and its burdens better distributed, but it is
useless to urge them in view of the fact that successive
Boards of Estimate have really desired to economize but have
been unable to do so. There is need of some authoritative
and comprehensive investigation of the liabilities and respon¬
sibilities of the city, and of its resources in property taxation.





IN view of the financial difficulties under which the city is
laboring, many people are urging that the use of the
city's money to construct the Broadway-Lexington Avenue
Subway without any guarantee of a responsible tenant should
uot be considered for one moment. They say the City is
already building a subway in Brooklyn, and a connecting sub¬
way in Manliattan, for which no tenants have been secured;
and in the opinion of the best transit experts one if not both
of these subways will be operated at a loss. Such a risk must
not be repeated. Since consolidation some $60,000,000 or
70,000,000 have been invested in East River bridges, which,
whatever their value to the city, are not or will not be even
remotely self-sustained, aud which constitute a grave burden*
upon the Manhattan taxpayer. These citizens think that
hereafter ail' transit improvements should be made to pay
for themselves, and unless their profitable operation is as¬
sured, they should not be constructed. It is a fair presump¬
tion that they cannot be profitably operated, in case a respon¬
sible operating company cannot be found; and the policy
should consequently be definitely established by the Board
of Estimate of never, or almost never, constructing a sub¬
way until it is assured of a satisfactory tenant. Possibly
some exception to such a rule may be allowed under certain
conditions, but assuredly every effort to avoid construction
in advance of an operative lease should be made. The city
cannot afford to spend its credit on possibly unremunerative
subways, when so many remunerative subways could be
built.





THE Wall Street Journal recently contained one of the
most convincing exposures of the subway policy of the
Public Service Commission that has yet been published. It
points out that the economical way to build new subways
would be to construct a small portion first, supplying the
larger center of population, in order that the old work
should be self-supporting during the period when the new
constrnction was undertaken bit by bit. In the case of sub¬
ways, every arrangement would, be made to limit the amount
of excavation and to insure cooperation with existing sub¬
ways, so as thereby to obtain traffic-feeders. The Journal
then points out that the tri-borough route violates every one
of these fundamental canons. No attempt is made to connect
with other subways. From 42nd Street to the Battery, where
it is proposed to establish that fruitful source of congestion,
a stub-end, it is in competition with a subway in which the