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September 17, 1887
The Record and Guide.
THE RECORD AND GUIDE,
Published every Saturday.
191 Broad-way, IST. '^,
Onr Telephone CaU Is - - - - - JOHN 370.
OIVE WAR, in advance, SIX DOLLARS.
Communications should be addressed to
C. W. SWEET, 191 Broadway.
J. T. LINDSEY. Businesa Manager,
SEPTEMBER 17, 1887.
Tbe bears seem to have the best of it in the stock market. All
the accidents are in their favor. The country ia prosperous, rail¬
road earnings large, and there are a number of deals on hand
which ought to advance prices. But somehow the general publio
seema to have other uees for its money than in buying railroad
securities. Our foreign trade has an unwholesome look. We
are importing far more than we are exporting. We shall have less
grain to sell than in previous years, and the abundant crops in
Europe have put prices lower than they have been in thirty years.
What helps sustain our markets is the purchase of bonds by
Europeans to build new railroads in the West. This is why gold
continues to come in spite of an adverse balance of trade. As yet
there is no indication as to what the real estate market will be this
fall. We notice that the building movement, so far as new plans
are concerned, has fallen off. The building trade, however, is
prosperous, as the work under way is very large.
Jay Gould undoubtedly was a bull—that ia, he hoped for higher
prices—all during the past summer, when the '* street " would have
it that he was a bear and in league with Cammack and Bateman.
As a heavy holder of securities, Gould would naturally sympathize
with the bulls; but his general reputation is so bad that dealers
** coppered " his hopeful utterances. In season and out of season
he has been having himself interviewed to show how valuable
is Missouri Pacific, Manhattan and Western Union, but in every
bear raid these stocks lead the market down ; yet they are all good
properties, and, if in the hands of the Vanderbilts, would sell twenty
or thirty points higher than they do at present.
kThe government crop reports are not a bear argument, although
they have been used to depress prices in Wall street, A wheat
crop of 440,000,000 bushels is a good average crop. Of corn we shall
probably have 1,600,000,000 bushels, which, with the residue from
the last two years will give us more than enough for a long time to
come. The cotton crop, though large, is something of a disap¬
pointment, for while we expected over 7,000,OOJ we shall probably
gather only 6,600,000 bales. Thia in really a very full crop. A
more serious matter is the failure of the potato crop and hay crop
in large sections of the country. These latter crops, it will be
recalled, are consumed near where they are grown. The same
remark is true of the corn crop, for not much more than 6 per
cent, of the latter leaves the counties in which it is raised. The
loss in corn, hay and potatoes in the drought-stricken regions will
give employment to the railroads that run through them, for the
farmers must have food for their cattle. True, there has been a
falling off in our agricultural product as compared with what was
expected in the early summer. It was hoped that our corn and
cotton crops at least would have been very much larger, but the
small yield will be more than made up for by the better price.
The Commercial Bulletin draws a rather gloomy picture of the
probable results of the real estate speculation in the West and
South. It fears that in time there will he "skeletons of cities''
after the speculation is over which will never amount to anything.
Doubtless the buying and bidding up of real estate is very greatly
overdone in certain sections of the West and South, but the fact
should be kept in mind that there is a heavy movement of popula¬
tion from the East to the West and from the North to certain
regions of the South. It is the unprecedented and unexpected
demand for residences for newcomers which has started the land
speculation we hear so much about. There has been a phenomenal
advance in rents, due to the vast foreign and domestic emigration.
There has been alao an unusual demand for store property of all
kinds. We are buildmg 13,000 miles of new railroads this year,
nearly all of which is in the far West, and this is having its effect
upon the new towns as well as upon the old centres of population.
or"petroleum. It takes months, even years, to liquidate in real
estate, whereas on the exnhangea the diff-^rence between the high¬
est and lowest prices is often a matter of a few days. There was a
panic in stocks in 1873, but the lowest pricea of real estate were
not experienced till 1877; and so it has r I ways been and will con¬
tinue to be. until such time when real estate can be bought and
sold as readily as stocks or grain can be. We hear much of the
stoppage of railroad building. Undoubtedly a check haa been given
to the giving out of new contracts. But it should be remembered
that the plans made this year, and the money already secured, will
take one and two years for their completion. Money will continue
to come from Europe all this fall to build the railroad mileage
already provided for, and while this work is going on we do not
see how there can be any disastrous fall in pricea in the real estate
markets of the West and South.
Our New York Stock Exchange has decided to have a Clearing
House and to charge only one-aixtf enth of 1 per cent, to all who
deal "on account ;" but the old charge of one-eighth, and 6 per
cent, interest on the money advanced for carrying stocks, will be
charged to investors and others who do business in the regular
way. In other words, there will be a discrimination in favor of the
trader or speculator, who buys and sells within the two weeks,
when settling days come about. This new method of doing busi¬
nes*^ will begin on October 1st. This "making fish of one and flesh
of another" cJaas of customers will not wo>k well, and the Consoli¬
dated Exchange will still have thw advanta2:e, as all the stocks
dealt in are periodically put through a Clearing House, while there
is practically free trade in commissions. The regular Stock
Exchange was unwise in not lowering its commisaiona years ago.
Its members were told over and over again that they ought to
establish a Clearing Honse and alao deal in ten share lots. Had
these changes been effected five years ago the Consolidated
Exchange would hare never been a rival, and bucket-shop gambling
would have never gained the headway that it has of late years.
Still, of course, when once speculation sets in it is apt to be
overdone, and the present increaee in land values cannot be main¬
tained. Fortunately a real estate "boom'' does not collapse eo
^uiokl;^ M nt manipulation in stockst or as « deal in wheati cotton
The new Rapid Transit Commisaioners favor a viaduct built
through the block and running from the Battery to the Forty-
second street depot. The time it would take for a train to run thia
distance would be ten minutes. This would be a good thing to do *
if the mouey could be raised; but it is substantialiy the old Tweed-
Ring scheme which was favored by the late A. T. Stewart and
other leading city magnates. But we prefer the Arcade proposi¬
tion. Mayor Hewitt, it seems, was angry with the Commission for
publishing their plan before it was submitted to him*
A New Era of Railroad Building.
Western Europe has got nearly all the railroads it needs. What¬
ever is done in the future will be to develop lines of travel already
in existence; but railway construction will keep right on in this
country until we can boast of as large a mileage as all the rest of
the world combined. We have now nearly 140,000 miles of road
capitalized in bonds and stock for something over |8,000,(iOO,OtJO.
But the railroads of the future are to be constructed mainly in
Asia. The iron track hap already coinected the Caspian Sea with
the great central plateau of Asia, which was the birthplace of the
Aryan race, and from which have come the mighty armed hordes
which swept over India and Europe down to the Middle Ages. The
Russian race is recivilizing the wandering tribes which for some
centuries have dominated in Central Asia and kept it outside the
progressive influences of our modern life.
The most notable railway enterprise now under way ia the road
which is about to be constructed through Siberia to the Pacific
Ocean, and which will connect the latter with St. Petersburg by
October, 1891. Sometime or other, of course, a railroad will run
up our Pacific coast through British Columbia and, Alaska to
Behrings Straits, TheUime is coming when some who will read
this article will be able to take a car in New.York for St. Peters¬
burg by rail all the way, except the ferry at Behrings Straits. By
aid of this new line Russia expects to bring new wheat fields into
use. A system of water communication has for some time ppat
been under way in Siberia,'which will feed the railroad line tvb-
ning west to crowded Central Europe.
Another line is talked of from the Caspian Sea to Viadiavostock.
This would be a menace to China, and accounts for the change of
policy recently adopted by the rulers of_^that populous empire.
China ia developing a telegraph system/and is negotiating with
certain Americans for telephone i accommodations and for the
establishment of banks. „ Already China , possesses quite a formid¬
able fleet, and the near approach of a European power will necessi¬
tate the building of a railway system to connect the great divisions
of China with the capital at Pekin. Thus, while Europe has practi¬
cally slopped tte building of any more great lines, the work may
be said only to have begun in Asia. England canuot begm to sup¬
ply the demand for new railroads in the East Indies. ^ The United
States will doubtless have much to do with railroad construe^