Real  Estate   Record





AND BUILDERS' GUIDE.





Vol. XXIY.





NEW YOBK, SATUEDAY, OCTOBER 25, 1879.





No. 006.





Published Weekly by

Wil^t %ml €Bhk Secorb %%samtxm.

TERJIS.

ONE YKAR, in ad vance.... SIO.OO.

Communications should be addressed to

C.  MV.  SVITEET,

Nos. 345 AND 347 Broadway





DANGER SIGNALS.

It is not pleasant to perform the part of the
skeleton at the feast, but the old Egyptian cus¬
tom had its uses. We are in " booming " times.
Prices are rising; everybody is hopeful and
happy; the "set-backs" of the market are for
small amoimts; the advances are for large fig¬
ures, and the wisest and most conservative ad¬
mit that for the rest of this year, at least, we
shall have a "bull" market in everything. But
it is well even in these flush times to look at the
other side of the question—to scan the horizon
closely so as to see if there is any cloud over¬
hanging the business community, and this we
propose to do, for we are convinced that, tem¬
porarily, there will be some disappointment,
especially among builders. From what we hear
we judge that the sale of new buildings has not
ecpialled the expectations of those who have put
their money into ventures of this kind. The
speculative demand for lots last spring, upon
which to erect houses, put up the market value
not only of land on the central zone of the city,
but also advanced the price, a.-? we showed
last week, of all the materials which enter into
the construction of a bouse. Bricks, lumber, lath,
hardware, nails, and more especially labor, all
command higher figures than they did last spring,
so that the builder, who was eager for business,
and willing to work on a narrow margin, found
that the advance in the price of material and
labor put him in debt in all buildings for which
he had contracts. Masons and carpenters, that
is, the employers, have not found a very large
profit in the year's business thus far owing to the
advancing tide of prices going beyond their esti¬
mates made last spring.

Then there has been another disappointment.
While some houses have been sold, undoubtedly
a great many remain in the hands of the build¬
ers and promoters, as yet without bidders, much
less occupants. The present upward movement
is in strong hands and everybody is confident of
the future, and hence it is not difificult to obtain
money to carry houses for a few months, until
they are sold, but the buying movement has
hardly commenced as yet, and we apprehend
that the demand for houses will not be active
until next spring. In their eagerness for business
builders have taken low contracts and have, for
the present at least, overstocked the market.
We judge there are a number of bargains for
those who have ready money and who wish to buy
new houses. Wo are sure that we are justified
iu recommending anybody who wishes a bouse
or who wants to put his money where it will be
certain of an advance, to buy any of the new
houses now in the market in this city. There
must be a margin of twenty per cent, within a
year's'time





But apart from the building trade there are
other indications that by next spring we may find
that there has been an over-production in many
departments of business. It is . ominous that
cotton goods are very cheap, that worsted goods
have not the ready sale it is supposed they would
have. There has been a halt, and the cause is not
very diflicult to seek. The people who consume
cotton goods are not in a position to purchase.
It should be remembered that the great spending
class is the working class; it is the people who
toil ten hours a day for six day in the week, and
who depend upon their weekly wages. This
class, while better paid than last year, has not
the same income that it had before 1S73. There
have been many theories put forward to account
for the dull times after the panic of 1873, but the
most comprehensive one has been overlooked.
The employing class very naturally believe in
low wages, but a moment's consideration will
show that while low wages is an excellent thing
for the individual employers, it is a very bad
thing for the employers as a class. The wage-
teceiving class comprise the immense bulk of the
community. The capitalists and the employing
class are, after all, a mere fraction of our total
population, U nless wages are high there is little
money to spend, and hence no great demand for
either the necessaries or luxuries of life. Up to
1S73 it was estimated that there were eight million
of workers, men and women, in this country who
received on an average fifteen dollars per
week. By the years 1S7.5 and 1876 wages had
been reduced one-third, and probably more. If
the whole of the eight million were kept em¬
ployed, which they were not, it would follow
that as wages had been reduced on an average
from fifteen to ten dollars per week that the
wages fund would be forty million dollars per
week less than previous to 1873. Now, forty
million dollars a week makes an enormous aggre¬
gate for the year. It is probable that the amount
of wages paid out is far less than our figures,
and that there was a difference of fifty to sixty
million dollars a week received by the working
classes proper. This, of course, would mean a
smaller consumption of all manufactured articles,
both foreign and domestic, and this one fact
explains the dulness of trade from 1873 to 1878. We
cannot expect a very wide consumption of goods
until the great bulk of the community of common
people are in receipt of better incomes. There
has been some improvement. A great many
more are employed than in 1876 or 1877, fOr
instance, but the return of better times has been
anticipated by the employing classes, and they
have set to work [producing goods for which we
fear they will find in time there is no immediate
market. There being an abundance of money, and
prices beginning to rise, all who had the means
or credit have rushed at once into producing.
They have put up the price, first, of iron, and
then of all the other metals. Every article which
enters into consumption has steadily appreciated
in value, and that in advance of the ability of the
country to consume. Substantially, we are on a
hopeful or credit basis in all our productions
except, perhaps, in the matter of iron, steel and
the associated metals, for there is a real demand
for railroad iron. But we would not be surprised
to find by next April or May that tbe workers in





copper, tiu.lead, spelter and ziuc would find that
they had over-stocked the market temporarily
It should be remembered that our facilities for
production are enormous. All the mechanical
inventions of the last few years have been in the
direction of greater, economy of labor and in¬
creased efticiency. It is not, perhaps, wise to say
that there can be an absolute over-production,
but it is quite clear that the ability to consume
does not keap pace with the modei-n ability to
produce manufactured articles. It is idle to say
there are too many shoes or too much clothing,
when so large a proportion of mankind are com¬
pelled to use but few shoes and little clothing.
The problem for the social philosopher is how to
increase the ability to consume, and that can only
be done, so far as we can see, by the increase in
the means of the w-age receiving class. We all
are familiar with the stimulus to prices by gov¬
ernment purchases during the civil war, when
substitutes were receiving from three hundred to
nine hundred dollars apiece; when the govern¬
ment was the great purchaser of materials of war
and worsted goods. Then times were indeed
flush. Everybody was making money. But the
government is not now a largo purchaser, nor
has any power in the community equivalent
taken its place. It follows that we have got to
look forward to the day when the laboring classes
—people who are in the habit of receiving wages
and salaries—will be in a position to consume
more than they do now. Builders judge right in
supposing that people who have made money in
stocks will want houses and lands. Real estate
we regard to-day as among the best of purchases,
because the great middle classes who have made
money by the rise in prices, and the appreciation
of bonds and stocks, will want better residences
by and by. Fifty thousand dollars wisely in¬
vested in real estate to-day will probably be
worth a hundred thousand by the close of tho
year 1880. One cannot very well make a mistake
at the present rates, but we do anticipate some
disappointment to the manufacturers who are
now producing so abundantly, upon the supposi¬
tion that there will be as ready a sale for their
goods as there was previous to 1873. This will
come in time, when land and labor command
higher prices than they do now ; but the real
prosperity of the manufacturing clas.s, the pro¬
ducers of all kinds of goods, will come after and
not before the movement in land and labor. The
farming class, especially at the West, will be our
heaviest purchasers this year, and there will be
an increased consumption in the East because
more people are employed and wages are better,
but we must expect to see a "set back," indeed
several of them, in trade, until such time as land
and labor are worth more than at present. We
look for a steady appreciation in all manufactures
of metal, wool and cotton goods, leather and the
like, but we also expect that at times there will
be depression, waiting for a market, and proba¬
bly lower prices, in short, some such experiences
as we are now passing through in regard to
cotton and woolen goods.

It should also be remembered that these times
differ from the paper money era, in one very im¬
portant respect. Then the " booms " were exclu¬
sively on fresh issues of paper, while now it is gold
and silver, which is the basis of our prosperity